Correlation Between Vanguard Mid-cap and Elbit Med
Can any of the company-specific risk be diversified away by investing in both Vanguard Mid-cap and Elbit Med 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 Vanguard Mid-cap and Elbit Med into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Mid Cap Index and Elbit Med Tech, you can compare the effects of market volatilities on Vanguard Mid-cap and Elbit Med 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 Vanguard Mid-cap with a short position of Elbit Med. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Mid-cap and Elbit Med.
Diversification Opportunities for Vanguard Mid-cap and Elbit Med
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vanguard and Elbit is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Mid Cap Index and Elbit Med Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Med Tech and Vanguard Mid-cap 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 Vanguard Mid Cap Index are associated (or correlated) with Elbit Med. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Med Tech has no effect on the direction of Vanguard Mid-cap i.e., Vanguard Mid-cap and Elbit Med go up and down completely randomly.
Pair Corralation between Vanguard Mid-cap and Elbit Med
Assuming the 90 days horizon Vanguard Mid Cap Index is expected to generate 0.09 times more return on investment than Elbit Med. However, Vanguard Mid Cap Index is 11.2 times less risky than Elbit Med. It trades about -0.28 of its potential returns per unit of risk. Elbit Med Tech is currently generating about -0.28 per unit of risk. If you would invest 6,743 in Vanguard Mid Cap Index on January 20, 2024 and sell it today you would lose (310.00) from holding Vanguard Mid Cap Index or give up 4.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Vanguard Mid Cap Index vs. Elbit Med Tech
Performance |
| Timeline |
| Vanguard Mid Cap |
| Elbit Med Tech |
Vanguard Mid-cap and Elbit Med Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Mid-cap and Elbit Med
The main advantage of trading using opposite Vanguard Mid-cap and Elbit Med positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Mid-cap position performs unexpectedly, Elbit Med 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 Med will offset losses from the drop in Elbit Med's long position.| Vanguard Mid-cap vs. Vanguard Institutional Index | Vanguard Mid-cap vs. Vanguard Total Bond | Vanguard Mid-cap vs. Vanguard Total International | Vanguard Mid-cap vs. Vanguard Institutional Index |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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