Correlation Between Electra and El Mor
Can any of the company-specific risk be diversified away by investing in both Electra and El Mor 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 Electra and El Mor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electra and El Mor Electric Installation, you can compare the effects of market volatilities on Electra and El Mor 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 Electra with a short position of El Mor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra and El Mor.
Diversification Opportunities for Electra and El Mor
Weak diversification
The 3 months correlation between Electra and ELMR is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Electra and El Mor Electric Installation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Mor Electric and Electra 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 Electra are associated (or correlated) with El Mor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Mor Electric has no effect on the direction of Electra i.e., Electra and El Mor go up and down completely randomly.
Pair Corralation between Electra and El Mor
Assuming the 90 days trading horizon Electra is expected to under-perform the El Mor. In addition to that, Electra is 1.24 times more volatile than El Mor Electric Installation. It trades about -0.02 of its total potential returns per unit of risk. El Mor Electric Installation is currently generating about 0.0 per unit of volatility. If you would invest 108,625 in El Mor Electric Installation on January 25, 2024 and sell it today you would lose (4,925) from holding El Mor Electric Installation or give up 4.53% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Electra vs. El Mor Electric Installation
Performance |
Timeline |
Electra |
El Mor Electric |
Electra and El Mor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Electra and El Mor
The main advantage of trading using opposite Electra and El Mor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra position performs unexpectedly, El Mor 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 El Mor will offset losses from the drop in El Mor's long position.Electra vs. Alony Hetz Properties | Electra vs. Melisron | Electra vs. Shufersal | Electra 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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