Correlation Between Icon and Elbit Medical

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

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

Diversification Opportunities for Icon and Elbit Medical

0.55

Correlation Coefficient

Icon  Elbit Medical

Very weak diversification

The 3 months correlation between Icon and Elbit is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Icon Group and Elbit Medical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Medical Techno and Icon 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 Icon Group are associated (or correlated) with Elbit Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Medical Techno has no effect on the direction of Icon i.e., Icon and Elbit Medical go up and down completely randomly.

Pair Corralation between Icon and Elbit Medical

Assuming the 90 days trading horizon Icon is expected to generate 58.76 times less return on investment than Elbit Medical. But when comparing it to its historical volatility, Icon Group is 2.65 times less risky than Elbit Medical. It trades about 0.0 of its potential returns per unit of risk. Elbit Medical Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,100  in Elbit Medical Technologies on May 5, 2025 and sell it today you would earn a total of  640.00  from holding Elbit Medical Technologies or generate 30.48% return on investment over 90 days.

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

Icon Group  vs.  Elbit Medical Technologies

Icon Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Icon Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Icon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Elbit Medical Techno

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elbit Medical Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Elbit Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Icon and Elbit Medical

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

The idea behind Icon Group and Elbit Medical Technologies 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.