Correlation Between Elbit Systems and Rami Levi
Can any of the company-specific risk be diversified away by investing in both Elbit Systems and Rami Levi 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 Rami Levi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Systems and Rami Levi, you can compare the effects of market volatilities on Elbit Systems and Rami Levi 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 Rami Levi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Systems and Rami Levi.
Diversification Opportunities for Elbit Systems and Rami Levi
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Elbit and Rami is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Systems and Rami Levi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rami Levi 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 Rami Levi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rami Levi has no effect on the direction of Elbit Systems i.e., Elbit Systems and Rami Levi go up and down completely randomly.
Pair Corralation between Elbit Systems and Rami Levi
Assuming the 90 days trading horizon Elbit Systems is expected to generate 1.65 times more return on investment than Rami Levi. However, Elbit Systems is 1.65 times more volatile than Rami Levi. It trades about 0.25 of its potential returns per unit of risk. Rami Levi is currently generating about 0.25 per unit of risk. If you would invest 8,556,000 in Elbit Systems on August 25, 2024 and sell it today you would earn a total of 704,000 from holding Elbit Systems or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elbit Systems vs. Rami Levi
Performance |
| Timeline |
| Elbit Systems |
| Rami Levi |
Elbit Systems and Rami Levi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Systems and Rami Levi
The main advantage of trading using opposite Elbit Systems and Rami Levi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Systems position performs unexpectedly, Rami Levi 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 Rami Levi will offset losses from the drop in Rami Levi's long position.| Elbit Systems vs. Arad | Elbit Systems vs. Alony Hetz Properties | Elbit Systems vs. Danel | Elbit Systems vs. Airport City |
| Rami Levi vs. Shufersal | Rami Levi vs. Bank Leumi Le Israel | Rami Levi vs. Bezeq Israeli Telecommunication | Rami Levi vs. Bank Hapoalim |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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