Correlation Between Elbit Imaging and US Bancorp

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Can any of the company-specific risk be diversified away by investing in both Elbit Imaging and US Bancorp 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 Elbit Imaging and US Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Imaging and US Bancorp PERP, you can compare the effects of market volatilities on Elbit Imaging and US Bancorp 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 Elbit Imaging with a short position of US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Imaging and US Bancorp.

Diversification Opportunities for Elbit Imaging and US Bancorp

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Elbit and USB-PA is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Imaging and US Bancorp PERP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp PERP and Elbit Imaging 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 Elbit Imaging are associated (or correlated) with US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp PERP has no effect on the direction of Elbit Imaging i.e., Elbit Imaging and US Bancorp go up and down completely randomly.

Pair Corralation between Elbit Imaging and US Bancorp

If you would invest  83,596  in US Bancorp PERP on December 30, 2023 and sell it today you would earn a total of  849.00  from holding US Bancorp PERP or generate 1.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy4.55%
ValuesDaily Returns

Elbit Imaging  vs.  US Bancorp PERP

 Performance 
       Timeline  
Elbit Imaging 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Elbit Imaging has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Elbit Imaging is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
US Bancorp PERP 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in US Bancorp PERP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, US Bancorp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Elbit Imaging and US Bancorp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Elbit Imaging and US Bancorp

The main advantage of trading using opposite Elbit Imaging and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Imaging position performs unexpectedly, US Bancorp 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 US Bancorp will offset losses from the drop in US Bancorp's long position.
The idea behind Elbit Imaging and US Bancorp PERP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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