Correlation Between Nextcom and Eldav L
Can any of the company-specific risk be diversified away by investing in both Nextcom and Eldav L 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 Nextcom and Eldav L into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextcom and Eldav L, you can compare the effects of market volatilities on Nextcom and Eldav L 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 Nextcom with a short position of Eldav L. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextcom and Eldav L.
Diversification Opportunities for Nextcom and Eldav L
Excellent diversification
The 3 months correlation between Nextcom and Eldav is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nextcom and Eldav L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldav L and Nextcom 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 Nextcom are associated (or correlated) with Eldav L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldav L has no effect on the direction of Nextcom i.e., Nextcom and Eldav L go up and down completely randomly.
Pair Corralation between Nextcom and Eldav L
Assuming the 90 days trading horizon Nextcom is expected to generate 1.39 times less return on investment than Eldav L. But when comparing it to its historical volatility, Nextcom is 1.08 times less risky than Eldav L. It trades about 0.01 of its potential returns per unit of risk. Eldav L is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 25,931 in Eldav L on August 27, 2024 and sell it today you would earn a total of 699.00 from holding Eldav L or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Nextcom vs. Eldav L
Performance |
| Timeline |
| Nextcom |
| Eldav L |
Nextcom and Eldav L Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextcom and Eldav L
The main advantage of trading using opposite Nextcom and Eldav L positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextcom position performs unexpectedly, Eldav L 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 Eldav L will offset losses from the drop in Eldav L's long position.| Nextcom vs. Bank Leumi Le Israel | Nextcom vs. Teva Pharmaceutical Industries | Nextcom vs. Bank Hapoalim | Nextcom vs. Elbit Systems |
| Eldav L vs. Bank Hapoalim | Eldav L vs. Israel Discount Bank | Eldav L vs. Bezeq Israeli Telecommunication | Eldav L vs. Elbit Systems |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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