Correlation Between Mivtach Shamir and El Al
Can any of the company-specific risk be diversified away by investing in both Mivtach Shamir 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 Mivtach Shamir and El Al into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mivtach Shamir and El Al Israel, you can compare the effects of market volatilities on Mivtach Shamir 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 Mivtach Shamir with a short position of El Al. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mivtach Shamir and El Al.
Diversification Opportunities for Mivtach Shamir and El Al
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mivtach and ELAL is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Mivtach Shamir 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 Mivtach Shamir 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 Mivtach Shamir 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 Mivtach Shamir i.e., Mivtach Shamir and El Al go up and down completely randomly.
Pair Corralation between Mivtach Shamir and El Al
Assuming the 90 days trading horizon Mivtach Shamir is expected to generate 1.17 times less return on investment than El Al. But when comparing it to its historical volatility, Mivtach Shamir is 1.56 times less risky than El Al. It trades about 0.11 of its potential returns per unit of risk. El Al Israel is currently generating about 0.08 of returns per unit of risk over similar time horizon. 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mivtach Shamir vs. El Al Israel
Performance |
| Timeline |
| Mivtach Shamir |
| El Al Israel |
Mivtach Shamir and El Al Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mivtach Shamir and El Al
The main advantage of trading using opposite Mivtach Shamir and El Al positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mivtach Shamir 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.| Mivtach Shamir vs. Bank Hapoalim | Mivtach Shamir vs. Israel Discount Bank | Mivtach Shamir vs. First International Bank | Mivtach Shamir vs. Elbit Systems |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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