Correlation Between Israel Land and El Al
Can any of the company-specific risk be diversified away by investing in both Israel Land 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 Israel Land and El Al into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Land Development and El Al Israel, you can compare the effects of market volatilities on Israel Land 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 Israel Land with a short position of El Al. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Land and El Al.
Diversification Opportunities for Israel Land and El Al
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Israel and ELAL is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Israel Land Development 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 Israel Land 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 Israel Land Development 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 Israel Land i.e., Israel Land and El Al go up and down completely randomly.
Pair Corralation between Israel Land and El Al
Assuming the 90 days trading horizon Israel Land is expected to generate 1.48 times less return on investment than El Al. In addition to that, Israel Land is 1.01 times more volatile than El Al Israel. It trades about 0.05 of its total potential returns per unit of risk. El Al Israel is currently generating about 0.08 per unit of volatility. If you would invest 29,548 in El Al Israel on September 3, 2024 and sell it today you would earn a total of 37,452 from holding El Al Israel or generate 126.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Land Development vs. El Al Israel
Performance |
| Timeline |
| Israel Land Development |
| El Al Israel |
Israel Land and El Al Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Land and El Al
The main advantage of trading using opposite Israel Land and El Al positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Land 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.| Israel Land vs. Israel Land Development | Israel Land vs. Lapidoth | Israel Land vs. Ilex Medical | Israel Land vs. Aerodrome Group |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |