Correlation Between Multi Retail and Elbit Imaging
Can any of the company-specific risk be diversified away by investing in both Multi Retail and Elbit Imaging 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 Multi Retail and Elbit Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Retail Group and Elbit Imaging, you can compare the effects of market volatilities on Multi Retail and Elbit Imaging 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 Multi Retail with a short position of Elbit Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Retail and Elbit Imaging.
Diversification Opportunities for Multi Retail and Elbit Imaging
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Multi and Elbit is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Multi Retail Group and Elbit Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Imaging and Multi Retail 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 Multi Retail Group are associated (or correlated) with Elbit Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Imaging has no effect on the direction of Multi Retail i.e., Multi Retail and Elbit Imaging go up and down completely randomly.
Pair Corralation between Multi Retail and Elbit Imaging
Assuming the 90 days trading horizon Multi Retail Group is expected to generate 1.24 times more return on investment than Elbit Imaging. However, Multi Retail is 1.24 times more volatile than Elbit Imaging. It trades about 0.22 of its potential returns per unit of risk. Elbit Imaging is currently generating about 0.05 per unit of risk. If you would invest 21,270 in Multi Retail Group on September 4, 2024 and sell it today you would earn a total of 83,730 from holding Multi Retail Group or generate 393.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Retail Group vs. Elbit Imaging
Performance |
| Timeline |
| Multi Retail Group |
| Elbit Imaging |
Multi Retail and Elbit Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Retail and Elbit Imaging
The main advantage of trading using opposite Multi Retail and Elbit Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Retail position performs unexpectedly, Elbit Imaging 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 Imaging will offset losses from the drop in Elbit Imaging's long position.| Multi Retail vs. Israel China Biotechnology | Multi Retail vs. Rapac Communication Infrastructure | Multi Retail vs. Shagrir Group Vehicle | Multi Retail vs. Bezeq Israeli Telecommunication |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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