Correlation Between Elbit Systems and Rekah Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Elbit Systems and Rekah Pharmaceutical 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 Rekah Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Systems and Rekah Pharmaceutical Industry, you can compare the effects of market volatilities on Elbit Systems and Rekah Pharmaceutical 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 Rekah Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Systems and Rekah Pharmaceutical.
Diversification Opportunities for Elbit Systems and Rekah Pharmaceutical
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elbit and Rekah is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Systems and Rekah Pharmaceutical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rekah Pharmaceutical 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 Rekah Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rekah Pharmaceutical has no effect on the direction of Elbit Systems i.e., Elbit Systems and Rekah Pharmaceutical go up and down completely randomly.
Pair Corralation between Elbit Systems and Rekah Pharmaceutical
Assuming the 90 days trading horizon Elbit Systems is expected to generate 0.61 times more return on investment than Rekah Pharmaceutical. However, Elbit Systems is 1.63 times less risky than Rekah Pharmaceutical. It trades about 0.24 of its potential returns per unit of risk. Rekah Pharmaceutical Industry is currently generating about 0.11 per unit of risk. If you would invest 8,556,000 in Elbit Systems on August 29, 2024 and sell it today you would earn a total of 714,000 from holding Elbit Systems or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elbit Systems vs. Rekah Pharmaceutical Industry
Performance |
| Timeline |
| Elbit Systems |
| Rekah Pharmaceutical |
Elbit Systems and Rekah Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Systems and Rekah Pharmaceutical
The main advantage of trading using opposite Elbit Systems and Rekah Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Systems position performs unexpectedly, Rekah Pharmaceutical 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 Rekah Pharmaceutical will offset losses from the drop in Rekah Pharmaceutical'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 |
| Rekah Pharmaceutical vs. Kamada | Rekah Pharmaceutical vs. Bet Shemesh Engines | Rekah Pharmaceutical vs. Unitronics | Rekah Pharmaceutical vs. PCB Tec |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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