Correlation Between EN Shoham and Elbit Imaging
Can any of the company-specific risk be diversified away by investing in both EN Shoham 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 EN Shoham and Elbit Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EN Shoham Business and Elbit Imaging, you can compare the effects of market volatilities on EN Shoham 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 EN Shoham with a short position of Elbit Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of EN Shoham and Elbit Imaging.
Diversification Opportunities for EN Shoham and Elbit Imaging
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SHOM and Elbit is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding EN Shoham Business and Elbit Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Imaging and EN Shoham 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 EN Shoham Business 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 EN Shoham i.e., EN Shoham and Elbit Imaging go up and down completely randomly.
Pair Corralation between EN Shoham and Elbit Imaging
Assuming the 90 days trading horizon EN Shoham is expected to generate 10.4 times less return on investment than Elbit Imaging. But when comparing it to its historical volatility, EN Shoham Business is 3.29 times less risky than Elbit Imaging. It trades about 0.06 of its potential returns per unit of risk. Elbit Imaging is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 60,000 in Elbit Imaging on November 3, 2024 and sell it today you would earn a total of 14,000 from holding Elbit Imaging or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EN Shoham Business vs. Elbit Imaging
Performance |
| Timeline |
| EN Shoham Business |
| Elbit Imaging |
EN Shoham and Elbit Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EN Shoham and Elbit Imaging
The main advantage of trading using opposite EN Shoham and Elbit Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EN Shoham 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.| EN Shoham vs. Menif Financial Services | EN Shoham vs. Accel Solutions Group | EN Shoham vs. Rani Zim Shopping | EN Shoham vs. Mivtach Shamir |
| Elbit Imaging vs. Abra Information Technologies | Elbit Imaging vs. Clal Insurance Enterprises | Elbit Imaging vs. Electreon Wireless | Elbit Imaging vs. Analyst IMS Investment |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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