Correlation Between Gold Bond and Elbit Systems
Can any of the company-specific risk be diversified away by investing in both Gold Bond and Elbit Systems 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 Gold Bond and Elbit Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gold Bond and Elbit Systems, you can compare the effects of market volatilities on Gold Bond and Elbit Systems 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 Gold Bond with a short position of Elbit Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bond and Elbit Systems.
Diversification Opportunities for Gold Bond and Elbit Systems
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gold and Elbit is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding The Gold Bond and Elbit Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Systems and Gold Bond 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 The Gold Bond are associated (or correlated) with Elbit Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Systems has no effect on the direction of Gold Bond i.e., Gold Bond and Elbit Systems go up and down completely randomly.
Pair Corralation between Gold Bond and Elbit Systems
Assuming the 90 days trading horizon Gold Bond is expected to generate 1.33 times less return on investment than Elbit Systems. In addition to that, Gold Bond is 1.38 times more volatile than Elbit Systems. It trades about 0.14 of its total potential returns per unit of risk. Elbit Systems is currently generating about 0.26 per unit of volatility. If you would invest 7,464,165 in Elbit Systems on August 29, 2024 and sell it today you would earn a total of 1,805,835 from holding Elbit Systems or generate 24.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gold Bond vs. Elbit Systems
Performance |
| Timeline |
| Gold Bond |
| Elbit Systems |
Gold Bond and Elbit Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Bond and Elbit Systems
The main advantage of trading using opposite Gold Bond and Elbit Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bond position performs unexpectedly, Elbit Systems 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 Elbit Systems will offset losses from the drop in Elbit Systems' long position.| Gold Bond vs. Big Shopping Centers | Gold Bond vs. Al Bad Massuot Yitzhak | Gold Bond vs. Harel Insurance Investments | Gold Bond vs. Palram |
| Elbit Systems vs. Nice | Elbit Systems vs. Bank Leumi Le Israel | Elbit Systems vs. Teva Pharmaceutical Industries | Elbit Systems 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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