Correlation Between Orbit Technologies and Elbit Medical
Can any of the company-specific risk be diversified away by investing in both Orbit Technologies 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 Orbit Technologies and Elbit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orbit Technologies and Elbit Medical Technologies, you can compare the effects of market volatilities on Orbit Technologies 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 Orbit Technologies with a short position of Elbit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orbit Technologies and Elbit Medical.
Diversification Opportunities for Orbit Technologies and Elbit Medical
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orbit and Elbit is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Orbit Technologies 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 Orbit Technologies 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 Orbit Technologies 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 Orbit Technologies i.e., Orbit Technologies and Elbit Medical go up and down completely randomly.
Pair Corralation between Orbit Technologies and Elbit Medical
Assuming the 90 days trading horizon Orbit Technologies is expected to generate 0.49 times more return on investment than Elbit Medical. However, Orbit Technologies is 2.03 times less risky than Elbit Medical. It trades about 0.31 of its potential returns per unit of risk. Elbit Medical Technologies is currently generating about 0.09 per unit of risk. If you would invest 233,700 in Orbit Technologies on August 30, 2024 and sell it today you would earn a total of 41,800 from holding Orbit Technologies or generate 17.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.67% |
| Values | Daily Returns |
Orbit Technologies vs. Elbit Medical Technologies
Performance |
| Timeline |
| Orbit Technologies |
| Elbit Medical Techno |
Orbit Technologies and Elbit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orbit Technologies and Elbit Medical
The main advantage of trading using opposite Orbit Technologies and Elbit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orbit Technologies 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.| Orbit Technologies vs. Ormat Technologies | Orbit Technologies vs. Multi Retail Group | Orbit Technologies vs. Nova | Orbit Technologies vs. B Communications |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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