Correlation Between Bio View and El Al

Can any of the company-specific risk be diversified away by investing in both Bio View and El Al 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 Bio View and El Al into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bio View and El Al Israel, you can compare the effects of market volatilities on Bio View and El Al 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 Bio View with a short position of El Al. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio View and El Al.

Diversification Opportunities for Bio View and El Al

-0.71

Correlation Coefficient

Bio View  El Al

Pay attention - limited upside

The 3 months correlation between Bio and ELAL is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bio View and El Al Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Al Israel and Bio View 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 Bio View are associated (or correlated) with El Al. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Al Israel has no effect on the direction of Bio View i.e., Bio View and El Al go up and down completely randomly.

Pair Corralation between Bio View and El Al

Assuming the 90 days trading horizon Bio View is expected to under-perform the El Al. In addition to that, Bio View is 1.39 times more volatile than El Al Israel. It trades about -0.15 of its total potential returns per unit of risk. El Al Israel is currently generating about 0.32 per unit of volatility. If you would invest  44,320  in El Al Israel on February 7, 2024 and sell it today you would earn a total of  6,680  from holding El Al Israel or generate 15.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.33%
Values	Daily Returns

Bio View  vs.  El Al Israel

Bio View

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bio View has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

El Al Israel

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in El Al Israel are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, El Al sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bio View and El Al

The main advantage of trading using opposite Bio View and El Al positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio View position performs unexpectedly, El Al 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 Al will offset losses from the drop in El Al's long position.

The idea behind Bio View and El Al Israel 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.