Correlation Between Plasson Indus and Elbit Imaging
Can any of the company-specific risk be diversified away by investing in both Plasson Indus and Elbit Imaging 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 Plasson Indus and Elbit Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plasson Indus and Elbit Imaging, you can compare the effects of market volatilities on Plasson Indus and Elbit Imaging 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 Plasson Indus with a short position of Elbit Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plasson Indus and Elbit Imaging.
Diversification Opportunities for Plasson Indus and Elbit Imaging
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Plasson and Elbit is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Plasson Indus and Elbit Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Imaging and Plasson Indus 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 Plasson Indus are associated (or correlated) with Elbit Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Imaging has no effect on the direction of Plasson Indus i.e., Plasson Indus and Elbit Imaging go up and down completely randomly.
Pair Corralation between Plasson Indus and Elbit Imaging
Assuming the 90 days trading horizon Plasson Indus is expected to generate 2.39 times less return on investment than Elbit Imaging. But when comparing it to its historical volatility, Plasson Indus is 3.41 times less risky than Elbit Imaging. It trades about 0.5 of its potential returns per unit of risk. Elbit Imaging is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 59,100 in Elbit Imaging on October 24, 2024 and sell it today you would earn a total of 24,900 from holding Elbit Imaging or generate 42.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Plasson Indus vs. Elbit Imaging
Performance |
| Timeline |
| Plasson Indus |
| Elbit Imaging |
Plasson Indus and Elbit Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plasson Indus and Elbit Imaging
The main advantage of trading using opposite Plasson Indus and Elbit Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plasson Indus position performs unexpectedly, Elbit Imaging 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 Imaging will offset losses from the drop in Elbit Imaging's long position.| Plasson Indus vs. Danel | Plasson Indus vs. Bezeq Israeli Telecommunication | Plasson Indus vs. Malam Team | Plasson Indus vs. Matrix |
| Elbit Imaging vs. One Software Technologies | Elbit Imaging vs. Libra Insurance | Elbit Imaging vs. Harel Insurance Investments | Elbit Imaging vs. Rapac Communication Infrastructure |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |