Correlation Between Menora Miv and Elbit Systems
Can any of the company-specific risk be diversified away by investing in both Menora Miv 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 Menora Miv and Elbit Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Menora Miv Hld and Elbit Systems, you can compare the effects of market volatilities on Menora Miv 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 Menora Miv with a short position of Elbit Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Menora Miv and Elbit Systems.
Diversification Opportunities for Menora Miv and Elbit Systems
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Menora and Elbit is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Menora Miv Hld and Elbit Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Systems and Menora Miv 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 Menora Miv Hld 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 Menora Miv i.e., Menora Miv and Elbit Systems go up and down completely randomly.
Pair Corralation between Menora Miv and Elbit Systems
Assuming the 90 days trading horizon Menora Miv Hld is expected to generate 1.28 times more return on investment than Elbit Systems. However, Menora Miv is 1.28 times more volatile than Elbit Systems. It trades about 0.02 of its potential returns per unit of risk. Elbit Systems is currently generating about -0.01 per unit of risk. If you would invest 894,724 in Menora Miv Hld on January 26, 2024 and sell it today you would earn a total of 9,076 from holding Menora Miv Hld or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Menora Miv Hld vs. Elbit Systems
Performance |
| Timeline |
| Menora Miv Hld |
| Elbit Systems |
Menora Miv and Elbit Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Menora Miv and Elbit Systems
The main advantage of trading using opposite Menora Miv and Elbit Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Menora Miv 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 Menora Miv Hld 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.| Elbit Systems vs. Alony Hetz Properties | Elbit Systems vs. Melisron | Elbit Systems vs. Shufersal | Elbit Systems 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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