Correlation Between Evoke Pharma and Elbit Imaging
Can any of the company-specific risk be diversified away by investing in both Evoke Pharma and Elbit Imaging 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 Evoke Pharma and Elbit Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evoke Pharma and Elbit Imaging, you can compare the effects of market volatilities on Evoke Pharma and Elbit Imaging 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 Evoke Pharma with a short position of Elbit Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evoke Pharma and Elbit Imaging.
Diversification Opportunities for Evoke Pharma and Elbit Imaging
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evoke and Elbit is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Evoke Pharma and Elbit Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Imaging and Evoke Pharma 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 Evoke Pharma are associated (or correlated) with Elbit Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Imaging has no effect on the direction of Evoke Pharma i.e., Evoke Pharma and Elbit Imaging go up and down completely randomly.
Pair Corralation between Evoke Pharma and Elbit Imaging
Given the investment horizon of 90 days Evoke Pharma is expected to under-perform the Elbit Imaging. In addition to that, Evoke Pharma is 2.74 times more volatile than Elbit Imaging. It trades about -0.2 of its total potential returns per unit of risk. Elbit Imaging is currently generating about -0.15 per unit of volatility. If you would invest 37,400 in Elbit Imaging on January 26, 2024 and sell it today you would lose (2,100) from holding Elbit Imaging or give up 5.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 76.19% |
| Values | Daily Returns |
Evoke Pharma vs. Elbit Imaging
Performance |
| Timeline |
| Evoke Pharma |
| Elbit Imaging |
Evoke Pharma and Elbit Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evoke Pharma and Elbit Imaging
The main advantage of trading using opposite Evoke Pharma and Elbit Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evoke Pharma position performs unexpectedly, Elbit Imaging 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 Imaging will offset losses from the drop in Elbit Imaging's long position.| Evoke Pharma vs. Petros Pharmaceuticals | Evoke Pharma vs. Cumberland Pharmaceuticals | Evoke Pharma vs. PainreformLtd | Evoke Pharma vs. Aquestive Therapeutics |
| Elbit Imaging vs. Intercure | Elbit Imaging vs. Brainsway | Elbit Imaging vs. Bio View | Elbit Imaging vs. Endymed |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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