Correlation Between Elbit Systems and Peninsula
Can any of the company-specific risk be diversified away by investing in both Elbit Systems and Peninsula at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Elbit Systems and Peninsula into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Systems and Peninsula Group, you can compare the effects of market volatilities on Elbit Systems and Peninsula and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Elbit Systems with a short position of Peninsula. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Systems and Peninsula.
Diversification Opportunities for Elbit Systems and Peninsula
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elbit and Peninsula is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Systems and Peninsula Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Group and Elbit Systems is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Elbit Systems are associated (or correlated) with Peninsula. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Group has no effect on the direction of Elbit Systems i.e., Elbit Systems and Peninsula go up and down completely randomly.
Pair Corralation between Elbit Systems and Peninsula
Assuming the 90 days trading horizon Elbit Systems is expected to generate 2.09 times more return on investment than Peninsula. However, Elbit Systems is 2.09 times more volatile than Peninsula Group. It trades about 0.17 of its potential returns per unit of risk. Peninsula Group is currently generating about 0.08 per unit of risk. If you would invest 726,350 in Elbit Systems on November 21, 2024 and sell it today you would earn a total of 9,973,650 from holding Elbit Systems or generate 1373.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Elbit Systems vs. Peninsula Group
Performance |
| Timeline |
| Elbit Systems |
| Peninsula Group |
Elbit Systems and Peninsula Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Systems and Peninsula
The main advantage of trading using opposite Elbit Systems and Peninsula positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Systems position performs unexpectedly, Peninsula can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Peninsula will offset losses from the drop in Peninsula's long position.| Elbit Systems vs. Nice | Elbit Systems vs. Bank Leumi Le Israel | Elbit Systems vs. Teva Pharmaceutical Industries | Elbit Systems vs. Bank Hapoalim |
| Peninsula vs. Opal Balance | Peninsula vs. Nawi Brothers Group | Peninsula vs. Mizrahi Tefahot | Peninsula vs. SR Accord |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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