Correlation Between Twitter and Elbit Systems
Can any of the company-specific risk be diversified away by investing in both Twitter 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 Twitter and Elbit Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twitter and Elbit Systems, you can compare the effects of market volatilities on Twitter 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 Twitter with a short position of Elbit Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twitter and Elbit Systems.
Diversification Opportunities for Twitter and Elbit Systems
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Twitter and Elbit is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and Elbit Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Systems and Twitter 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 Twitter 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 Twitter i.e., Twitter and Elbit Systems go up and down completely randomly.
Pair Corralation between Twitter and Elbit Systems
Given the investment horizon of 90 days Twitter is expected to generate 1.8 times more return on investment than Elbit Systems. However, Twitter is 1.8 times more volatile than Elbit Systems. It trades about 0.03 of its potential returns per unit of risk. Elbit Systems is currently generating about 0.02 per unit of risk. If you would invest 4,980 in Twitter on January 26, 2024 and sell it today you would earn a total of 390.00 from holding Twitter or generate 7.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 31.28% |
Values | Daily Returns |
Twitter vs. Elbit Systems
Performance |
Timeline |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Elbit Systems |
Twitter and Elbit Systems Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Twitter and Elbit Systems
The main advantage of trading using opposite Twitter and Elbit Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twitter 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.Twitter vs. Carters | Twitter vs. Barrick Gold Corp | Twitter vs. Zoom Video Communications | Twitter vs. Shoe Carnival |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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