Correlation Between Oron Group and Elbit Medical
Can any of the company-specific risk be diversified away by investing in both Oron Group 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 Oron Group and Elbit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oron Group Investments and Elbit Medical Technologies, you can compare the effects of market volatilities on Oron Group 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 Oron Group with a short position of Elbit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oron Group and Elbit Medical.
Diversification Opportunities for Oron Group and Elbit Medical
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oron and Elbit is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Oron Group Investments 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 Oron Group 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 Oron Group Investments 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 Oron Group i.e., Oron Group and Elbit Medical go up and down completely randomly.
Pair Corralation between Oron Group and Elbit Medical
Assuming the 90 days trading horizon Oron Group Investments is expected to generate 0.57 times more return on investment than Elbit Medical. However, Oron Group Investments is 1.74 times less risky than Elbit Medical. It trades about 0.09 of its potential returns per unit of risk. Elbit Medical Technologies is currently generating about -0.58 per unit of risk. If you would invest 95,940 in Oron Group Investments on September 18, 2024 and sell it today you would earn a total of 2,960 from holding Oron Group Investments or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Oron Group Investments vs. Elbit Medical Technologies
Performance |
| Timeline |
| Oron Group Investments |
| Elbit Medical Techno |
Oron Group and Elbit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oron Group and Elbit Medical
The main advantage of trading using opposite Oron Group and Elbit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oron Group 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.| Oron Group vs. Shikun Binui | Oron Group vs. Ashtrom Group | Oron Group vs. Aura Investments | Oron Group vs. Shapir Engineering Industry |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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