Correlation Between Tel Aviv and Elbit Imaging
Can any of the company-specific risk be diversified away by investing in both Tel Aviv 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 Tel Aviv and Elbit Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tel Aviv 35 and Elbit Imaging, you can compare the effects of market volatilities on Tel Aviv 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 Tel Aviv with a short position of Elbit Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tel Aviv and Elbit Imaging.
Diversification Opportunities for Tel Aviv and Elbit Imaging
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tel and Elbit is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Tel Aviv 35 and Elbit Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Imaging and Tel Aviv 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 Tel Aviv 35 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 Tel Aviv i.e., Tel Aviv and Elbit Imaging go up and down completely randomly.
Pair Corralation between Tel Aviv and Elbit Imaging
Assuming the 90 days trading horizon Tel Aviv 35 is expected to generate 0.31 times more return on investment than Elbit Imaging. However, Tel Aviv 35 is 3.23 times less risky than Elbit Imaging. It trades about 0.14 of its potential returns per unit of risk. Elbit Imaging is currently generating about 0.04 per unit of risk. If you would invest 170,256 in Tel Aviv 35 on September 1, 2024 and sell it today you would earn a total of 55,793 from holding Tel Aviv 35 or generate 32.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tel Aviv 35 vs. Elbit Imaging
Performance |
| Timeline |
Tel Aviv and Elbit Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Tel Aviv 35
Pair trading matchups for Tel Aviv
Elbit Imaging
Pair trading matchups for Elbit Imaging
Pair Trading with Tel Aviv and Elbit Imaging
The main advantage of trading using opposite Tel Aviv and Elbit Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tel Aviv 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.| Tel Aviv vs. YH Dimri Construction | Tel Aviv vs. Electreon Wireless | Tel Aviv vs. B Yair Building | Tel Aviv vs. One Software Technologies |
| Elbit Imaging vs. Opko Health | Elbit Imaging vs. Suny Cellular Communication | Elbit Imaging vs. Iargento Hi Tech | 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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