Correlation Between Elbit Imaging and Best Buy
Can any of the company-specific risk be diversified away by investing in both Elbit Imaging and Best Buy 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 Best Buy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Imaging and Best Buy Co, you can compare the effects of market volatilities on Elbit Imaging and Best Buy 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 Best Buy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Imaging and Best Buy.
Diversification Opportunities for Elbit Imaging and Best Buy
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elbit and Best is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Imaging and Best Buy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Best Buy 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 Best Buy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Best Buy has no effect on the direction of Elbit Imaging i.e., Elbit Imaging and Best Buy go up and down completely randomly.
Pair Corralation between Elbit Imaging and Best Buy
Assuming the 90 days trading horizon Elbit Imaging is expected to under-perform the Best Buy. In addition to that, Elbit Imaging is 1.56 times more volatile than Best Buy Co. It trades about -0.01 of its total potential returns per unit of risk. Best Buy Co is currently generating about 0.0 per unit of volatility. If you would invest 8,300 in Best Buy Co on January 26, 2024 and sell it today you would lose (857.00) from holding Best Buy Co or give up 10.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.95% |
| Values | Daily Returns |
Elbit Imaging vs. Best Buy Co
Performance |
| Timeline |
| Elbit Imaging |
| Best Buy |
Elbit Imaging and Best Buy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Imaging and Best Buy
The main advantage of trading using opposite Elbit Imaging and Best Buy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Imaging position performs unexpectedly, Best Buy 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 Best Buy will offset losses from the drop in Best Buy's long position.| Elbit Imaging vs. Intercure | Elbit Imaging vs. Bio View | Elbit Imaging vs. Endymed | Elbit Imaging vs. Human Xtensions |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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