Correlation Between Millennium Food and Elbit Medical
Can any of the company-specific risk be diversified away by investing in both Millennium Food and Elbit Medical 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 Millennium Food and Elbit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Millennium Food Tech LP and Elbit Medical Technologies, you can compare the effects of market volatilities on Millennium Food and Elbit Medical 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 Millennium Food with a short position of Elbit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Millennium Food and Elbit Medical.
Diversification Opportunities for Millennium Food and Elbit Medical
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Millennium and Elbit is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Millennium Food Tech LP and Elbit Medical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Medical Techno and Millennium Food 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 Millennium Food Tech LP are associated (or correlated) with Elbit Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Medical Techno has no effect on the direction of Millennium Food i.e., Millennium Food and Elbit Medical go up and down completely randomly.
Pair Corralation between Millennium Food and Elbit Medical
Assuming the 90 days trading horizon Millennium Food Tech LP is expected to under-perform the Elbit Medical. But the stock apears to be less risky and, when comparing its historical volatility, Millennium Food Tech LP is 1.85 times less risky than Elbit Medical. The stock trades about -0.12 of its potential returns per unit of risk. The Elbit Medical Technologies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,840 in Elbit Medical Technologies on August 30, 2024 and sell it today you would earn a total of 140.00 from holding Elbit Medical Technologies or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.67% |
| Values | Daily Returns |
Millennium Food Tech LP vs. Elbit Medical Technologies
Performance |
| Timeline |
| Millennium Food Tech |
| Elbit Medical Techno |
Millennium Food and Elbit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Millennium Food and Elbit Medical
The main advantage of trading using opposite Millennium Food and Elbit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Millennium Food position performs unexpectedly, Elbit Medical 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 Medical will offset losses from the drop in Elbit Medical's long position.| Millennium Food vs. Willy Food | Millennium Food vs. B Communications | Millennium Food vs. Nova | Millennium Food vs. Petrochemical |
| Elbit Medical vs. Nice | Elbit Medical vs. The Gold Bond | Elbit Medical vs. Bank Leumi Le Israel | Elbit Medical vs. ICL Israel Chemicals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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