Correlation Between Sofwave Medical and Elbit Imaging
Can any of the company-specific risk be diversified away by investing in both Sofwave Medical 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 Sofwave Medical and Elbit Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sofwave Medical and Elbit Imaging, you can compare the effects of market volatilities on Sofwave Medical 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 Sofwave Medical with a short position of Elbit Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofwave Medical and Elbit Imaging.
Diversification Opportunities for Sofwave Medical and Elbit Imaging
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sofwave and Elbit is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sofwave Medical and Elbit Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Imaging and Sofwave Medical 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 Sofwave Medical 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 Sofwave Medical i.e., Sofwave Medical and Elbit Imaging go up and down completely randomly.
Pair Corralation between Sofwave Medical and Elbit Imaging
Assuming the 90 days trading horizon Sofwave Medical is expected to generate 4.69 times less return on investment than Elbit Imaging. But when comparing it to its historical volatility, Sofwave Medical is 1.36 times less risky than Elbit Imaging. It trades about 0.1 of its potential returns per unit of risk. Elbit Imaging is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 59,100 in Elbit Imaging on October 23, 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 Against |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Sofwave Medical vs. Elbit Imaging
Performance |
| Timeline |
| Sofwave Medical |
| Elbit Imaging |
Sofwave Medical and Elbit Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sofwave Medical and Elbit Imaging
The main advantage of trading using opposite Sofwave Medical and Elbit Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofwave Medical 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.| Sofwave Medical vs. Computer Direct | Sofwave Medical vs. Clal Biotechnology Industries | Sofwave Medical vs. Isras Investment | Sofwave Medical vs. Abra Information Technologies |
| Elbit Imaging vs. Sure Tech Investments LP | Elbit Imaging vs. One Software Technologies | Elbit Imaging vs. Clal Biotechnology Industries | Elbit Imaging vs. Wesure Global Tech |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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