Correlation Between Elbit Systems and Ashot Ashkelon
Can any of the company-specific risk be diversified away by investing in both Elbit Systems and Ashot Ashkelon 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 Systems and Ashot Ashkelon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Systems and Ashot Ashkelon Industries, you can compare the effects of market volatilities on Elbit Systems and Ashot Ashkelon 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 Systems with a short position of Ashot Ashkelon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Systems and Ashot Ashkelon.
Diversification Opportunities for Elbit Systems and Ashot Ashkelon
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Elbit and Ashot is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Systems and Ashot Ashkelon Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashot Ashkelon Industries and Elbit Systems 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 Systems are associated (or correlated) with Ashot Ashkelon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashot Ashkelon Industries has no effect on the direction of Elbit Systems i.e., Elbit Systems and Ashot Ashkelon go up and down completely randomly.
Pair Corralation between Elbit Systems and Ashot Ashkelon
Assuming the 90 days trading horizon Elbit Systems is expected to generate 9.72 times less return on investment than Ashot Ashkelon. But when comparing it to its historical volatility, Elbit Systems is 2.63 times less risky than Ashot Ashkelon. It trades about 0.02 of its potential returns per unit of risk. Ashot Ashkelon Industries is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 273,500 in Ashot Ashkelon Industries on January 26, 2024 and sell it today you would earn a total of 11,500 from holding Ashot Ashkelon Industries or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elbit Systems vs. Ashot Ashkelon Industries
Performance |
| Timeline |
| Elbit Systems |
| Ashot Ashkelon Industries |
Elbit Systems and Ashot Ashkelon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Systems and Ashot Ashkelon
The main advantage of trading using opposite Elbit Systems and Ashot Ashkelon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Systems position performs unexpectedly, Ashot Ashkelon 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 Ashot Ashkelon will offset losses from the drop in Ashot Ashkelon's long position.| Elbit Systems vs. Alony Hetz Properties | Elbit Systems vs. Melisron | Elbit Systems vs. Shufersal | Elbit Systems vs. Israel Discount Bank |
| Ashot Ashkelon vs. Alony Hetz Properties | Ashot Ashkelon vs. Melisron | Ashot Ashkelon vs. Shufersal | Ashot Ashkelon vs. Israel Discount Bank |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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