Correlation Between Nawi Brothers and Elbit Systems
Can any of the company-specific risk be diversified away by investing in both Nawi Brothers and Elbit Systems 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 Nawi Brothers and Elbit Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nawi Brothers Group and Elbit Systems, you can compare the effects of market volatilities on Nawi Brothers and Elbit Systems 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 Nawi Brothers with a short position of Elbit Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nawi Brothers and Elbit Systems.
Diversification Opportunities for Nawi Brothers and Elbit Systems
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nawi and Elbit is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Nawi Brothers Group and Elbit Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Systems and Nawi Brothers 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 Nawi Brothers Group are associated (or correlated) with Elbit Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Systems has no effect on the direction of Nawi Brothers i.e., Nawi Brothers and Elbit Systems go up and down completely randomly.
Pair Corralation between Nawi Brothers and Elbit Systems
Assuming the 90 days trading horizon Nawi Brothers Group is expected to generate 1.01 times more return on investment than Elbit Systems. However, Nawi Brothers is 1.01 times more volatile than Elbit Systems. It trades about 0.18 of its potential returns per unit of risk. Elbit Systems is currently generating about 0.14 per unit of risk. If you would invest 256,316 in Nawi Brothers Group on September 1, 2024 and sell it today you would earn a total of 80,184 from holding Nawi Brothers Group or generate 31.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nawi Brothers Group vs. Elbit Systems
Performance |
| Timeline |
| Nawi Brothers Group |
| Elbit Systems |
Nawi Brothers and Elbit Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nawi Brothers and Elbit Systems
The main advantage of trading using opposite Nawi Brothers and Elbit Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nawi Brothers position performs unexpectedly, Elbit Systems 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 Systems will offset losses from the drop in Elbit Systems' long position.| Nawi Brothers vs. Menif Financial Services | Nawi Brothers vs. Accel Solutions Group | Nawi Brothers vs. Rani Zim Shopping | Nawi Brothers vs. Rapac Communication Infrastructure |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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