Correlation Between Electreon Wireless and Elbit Systems
Can any of the company-specific risk be diversified away by investing in both Electreon Wireless 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 Electreon Wireless and Elbit Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electreon Wireless and Elbit Systems, you can compare the effects of market volatilities on Electreon Wireless 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 Electreon Wireless with a short position of Elbit Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electreon Wireless and Elbit Systems.
Diversification Opportunities for Electreon Wireless and Elbit Systems
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electreon and Elbit is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Electreon Wireless and Elbit Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Systems and Electreon Wireless 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 Electreon Wireless 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 Electreon Wireless i.e., Electreon Wireless and Elbit Systems go up and down completely randomly.
Pair Corralation between Electreon Wireless and Elbit Systems
Assuming the 90 days trading horizon Electreon Wireless is expected to under-perform the Elbit Systems. In addition to that, Electreon Wireless is 5.04 times more volatile than Elbit Systems. It trades about -0.09 of its total potential returns per unit of risk. Elbit Systems is currently generating about -0.32 per unit of volatility. If you would invest 7,500,000 in Elbit Systems on March 8, 2024 and sell it today you would lose (501,000) from holding Elbit Systems or give up 6.68% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Electreon Wireless vs. Elbit Systems
Performance |
Timeline |
Electreon Wireless |
Elbit Systems |
Electreon Wireless and Elbit Systems Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Electreon Wireless and Elbit Systems
The main advantage of trading using opposite Electreon Wireless and Elbit Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electreon Wireless 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.Electreon Wireless vs. Augwind Energy Tech | Electreon Wireless vs. Enlight Renewable Energy | Electreon Wireless vs. Maytronics | Electreon Wireless vs. Fattal 1998 Holdings |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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