Correlation Between Eltek and AmpliTech

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

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

Diversification Opportunities for Eltek and AmpliTech

0.74

Correlation Coefficient

Eltek  AmpliTech

Poor diversification

The 3 months correlation between Eltek and AmpliTech is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eltek and AmpliTech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmpliTech Group and Eltek 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 Eltek are associated (or correlated) with AmpliTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmpliTech Group has no effect on the direction of Eltek i.e., Eltek and AmpliTech go up and down completely randomly.

Pair Corralation between Eltek and AmpliTech

Given the investment horizon of 90 days Eltek is expected to under-perform the AmpliTech. But the stock apears to be less risky and, when comparing its historical volatility, Eltek is 2.99 times less risky than AmpliTech. The stock trades about -0.11 of its potential returns per unit of risk. The AmpliTech Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  58.00  in AmpliTech Group on January 24, 2025 and sell it today you would lose (19.00) from holding AmpliTech Group or give up 32.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Eltek  vs.  AmpliTech Group

Eltek

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eltek has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

AmpliTech Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days AmpliTech Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, AmpliTech is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Eltek and AmpliTech

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

The idea behind Eltek and AmpliTech Group 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.