Correlation Between Rekah Pharmaceutical and Elbit Systems
Can any of the company-specific risk be diversified away by investing in both Rekah Pharmaceutical 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 Rekah Pharmaceutical and Elbit Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rekah Pharmaceutical Industry and Elbit Systems, you can compare the effects of market volatilities on Rekah Pharmaceutical 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 Rekah Pharmaceutical with a short position of Elbit Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rekah Pharmaceutical and Elbit Systems.
Diversification Opportunities for Rekah Pharmaceutical and Elbit Systems
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rekah and Elbit is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Rekah Pharmaceutical Industry and Elbit Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Systems and Rekah Pharmaceutical 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 Rekah Pharmaceutical Industry 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 Rekah Pharmaceutical i.e., Rekah Pharmaceutical and Elbit Systems go up and down completely randomly.
Pair Corralation between Rekah Pharmaceutical and Elbit Systems
Assuming the 90 days trading horizon Rekah Pharmaceutical is expected to generate 10.21 times less return on investment than Elbit Systems. In addition to that, Rekah Pharmaceutical is 1.67 times more volatile than Elbit Systems. It trades about 0.02 of its total potential returns per unit of risk. Elbit Systems is currently generating about 0.37 per unit of volatility. If you would invest 7,403,205 in Elbit Systems on August 29, 2024 and sell it today you would earn a total of 1,866,795 from holding Elbit Systems or generate 25.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rekah Pharmaceutical Industry vs. Elbit Systems
Performance |
| Timeline |
| Rekah Pharmaceutical |
| Elbit Systems |
Rekah Pharmaceutical and Elbit Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rekah Pharmaceutical and Elbit Systems
The main advantage of trading using opposite Rekah Pharmaceutical and Elbit Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rekah Pharmaceutical 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.| Rekah Pharmaceutical vs. Kamada | Rekah Pharmaceutical vs. Bet Shemesh Engines | Rekah Pharmaceutical vs. Unitronics | Rekah Pharmaceutical vs. PCB Tec |
| Elbit Systems vs. Nice | Elbit Systems vs. Bank Leumi Le Israel | Elbit Systems vs. Teva Pharmaceutical Industries | Elbit Systems vs. Bank Hapoalim |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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