Correlation Between Cubic and Elbit Systems

Can any of the company-specific risk be diversified away by investing in both Cubic 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 Cubic and Elbit Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cubic and Elbit Systems, you can compare the effects of market volatilities on Cubic 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 Cubic with a short position of Elbit Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cubic and Elbit Systems.

Diversification Opportunities for Cubic and Elbit Systems

0.0

Correlation Coefficient

Cubic  Elbit Systems

Pay attention - limited upside

The 3 months correlation between Cubic and Elbit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cubic and Elbit Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Systems and Cubic 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 Cubic 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 Cubic i.e., Cubic and Elbit Systems go up and down completely randomly.

Pair Corralation between Cubic and Elbit Systems

If you would invest (100.00) in Cubic on March 5, 2024 and sell it today you would earn a total of  100.00  from holding Cubic or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cubic  vs.  Elbit Systems

Cubic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cubic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Cubic is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Elbit Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elbit Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Cubic and Elbit Systems

The main advantage of trading using opposite Cubic and Elbit Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cubic 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.

The idea behind Cubic and Elbit Systems 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.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.