Correlation Between Mizrahi Tefahot and Elbit Medical
Can any of the company-specific risk be diversified away by investing in both Mizrahi Tefahot 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 Mizrahi Tefahot and Elbit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizrahi Tefahot and Elbit Medical Technologies, you can compare the effects of market volatilities on Mizrahi Tefahot 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 Mizrahi Tefahot with a short position of Elbit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizrahi Tefahot and Elbit Medical.
Diversification Opportunities for Mizrahi Tefahot and Elbit Medical
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mizrahi and Elbit is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Mizrahi Tefahot 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 Mizrahi Tefahot 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 Mizrahi Tefahot 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 Mizrahi Tefahot i.e., Mizrahi Tefahot and Elbit Medical go up and down completely randomly.
Pair Corralation between Mizrahi Tefahot and Elbit Medical
Assuming the 90 days trading horizon Mizrahi Tefahot is expected to generate 0.34 times more return on investment than Elbit Medical. However, Mizrahi Tefahot is 2.91 times less risky than Elbit Medical. It trades about 0.06 of its potential returns per unit of risk. Elbit Medical Technologies is currently generating about -0.03 per unit of risk. If you would invest 1,123,250 in Mizrahi Tefahot on August 27, 2024 and sell it today you would earn a total of 476,750 from holding Mizrahi Tefahot or generate 42.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 87.82% |
| Values | Daily Returns |
Mizrahi Tefahot vs. Elbit Medical Technologies
Performance |
| Timeline |
| Mizrahi Tefahot |
| Elbit Medical Techno |
Mizrahi Tefahot and Elbit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizrahi Tefahot and Elbit Medical
The main advantage of trading using opposite Mizrahi Tefahot and Elbit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizrahi Tefahot 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.| Mizrahi Tefahot vs. Bank Hapoalim | Mizrahi Tefahot vs. Israel Discount Bank | Mizrahi Tefahot vs. Bezeq Israeli Telecommunication | Mizrahi Tefahot vs. Elbit Systems |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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