Correlation Between Golf and El Al
Can any of the company-specific risk be diversified away by investing in both Golf and El Al 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 Golf and El Al into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golf Co Group and El Al Israel, you can compare the effects of market volatilities on Golf and El Al 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 Golf with a short position of El Al. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golf and El Al.
Diversification Opportunities for Golf and El Al
Almost no diversification
The 3 months correlation between Golf and ELAL is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Golf Co Group and El Al Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Al Israel and Golf 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 Golf Co Group are associated (or correlated) with El Al. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Al Israel has no effect on the direction of Golf i.e., Golf and El Al go up and down completely randomly.
Pair Corralation between Golf and El Al
Assuming the 90 days trading horizon Golf Co Group is expected to generate 0.49 times more return on investment than El Al. However, Golf Co Group is 2.05 times less risky than El Al. It trades about 0.1 of its potential returns per unit of risk. El Al Israel is currently generating about -0.16 per unit of risk. If you would invest 60,500 in Golf Co Group on September 2, 2024 and sell it today you would earn a total of 1,910 from holding Golf Co Group or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golf Co Group vs. El Al Israel
Performance |
| Timeline |
| Golf Co Group |
| El Al Israel |
Golf and El Al Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golf and El Al
The main advantage of trading using opposite Golf and El Al positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golf position performs unexpectedly, El Al 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 El Al will offset losses from the drop in El Al's long position.The idea behind Golf Co Group and El Al Israel pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| El Al vs. Delek Group | El Al vs. Teva Pharmaceutical Industries | El Al vs. Fattal 1998 Holdings | El Al vs. Bank Leumi Le Israel |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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