Correlation Between Vicor and Eltek
Can any of the company-specific risk be diversified away by investing in both Vicor and Eltek 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 Vicor and Eltek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vicor and Eltek, you can compare the effects of market volatilities on Vicor and Eltek 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 Vicor with a short position of Eltek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vicor and Eltek.
Diversification Opportunities for Vicor and Eltek
Weak diversification
The 3 months correlation between Vicor and Eltek is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Vicor and Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eltek and Vicor 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 Vicor are associated (or correlated) with Eltek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eltek has no effect on the direction of Vicor i.e., Vicor and Eltek go up and down completely randomly.
Pair Corralation between Vicor and Eltek
Given the investment horizon of 90 days Vicor is expected to generate 2.02 times more return on investment than Eltek. However, Vicor is 2.02 times more volatile than Eltek. It trades about 0.19 of its potential returns per unit of risk. Eltek is currently generating about 0.04 per unit of risk. If you would invest 3,573 in Vicor on September 2, 2024 and sell it today you would earn a total of 1,748 from holding Vicor or generate 48.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vicor vs. Eltek
Performance |
| Timeline |
| Vicor |
| Eltek |
Vicor and Eltek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vicor and Eltek
The main advantage of trading using opposite Vicor and Eltek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicor position performs unexpectedly, Eltek 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 Eltek will offset losses from the drop in Eltek's long position.| Vicor vs. Shenzhen Genvict Technologies | Vicor vs. Topsec Technologies Group | Vicor vs. Genus Power Infrastructures | Vicor vs. Risuntek |
| Eltek vs. Methode Electronics | Eltek vs. OSI Systems | Eltek vs. Bel Fuse A | Eltek vs. Richardson Electronics |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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