Correlation Between Shikun Binui and Elbit Systems
Can any of the company-specific risk be diversified away by investing in both Shikun Binui 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 Shikun Binui and Elbit Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shikun Binui and Elbit Systems, you can compare the effects of market volatilities on Shikun Binui 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 Shikun Binui with a short position of Elbit Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shikun Binui and Elbit Systems.
Diversification Opportunities for Shikun Binui and Elbit Systems
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shikun and Elbit is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shikun Binui and Elbit Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Systems and Shikun Binui 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 Shikun Binui 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 Shikun Binui i.e., Shikun Binui and Elbit Systems go up and down completely randomly.
Pair Corralation between Shikun Binui and Elbit Systems
Assuming the 90 days trading horizon Shikun Binui is expected to generate 1.19 times more return on investment than Elbit Systems. However, Shikun Binui is 1.19 times more volatile than Elbit Systems. It trades about 0.4 of its potential returns per unit of risk. Elbit Systems is currently generating about 0.38 per unit of risk. If you would invest 89,810 in Shikun Binui on August 28, 2024 and sell it today you would earn a total of 29,690 from holding Shikun Binui or generate 33.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shikun Binui vs. Elbit Systems
Performance |
| Timeline |
| Shikun Binui |
| Elbit Systems |
Shikun Binui and Elbit Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shikun Binui and Elbit Systems
The main advantage of trading using opposite Shikun Binui and Elbit Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shikun Binui 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.| Shikun Binui vs. Arad | Shikun Binui vs. Alony Hetz Properties | Shikun Binui vs. Danel | Shikun Binui vs. Airport City |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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