Correlation Between Viavi Solutions and Eltek

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

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

Diversification Opportunities for Viavi Solutions and Eltek

-0.07

Correlation Coefficient

Viavi Solutions  Eltek

Good diversification

The 3 months correlation between Viavi and Eltek is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Viavi Solutions and Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eltek and Viavi Solutions 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 Viavi Solutions are associated (or correlated) with Eltek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eltek has no effect on the direction of Viavi Solutions i.e., Viavi Solutions and Eltek go up and down completely randomly.

Pair Corralation between Viavi Solutions and Eltek

Given the investment horizon of 90 days Viavi Solutions is expected to generate 0.51 times more return on investment than Eltek. However, Viavi Solutions is 1.98 times less risky than Eltek. It trades about 0.15 of its potential returns per unit of risk. Eltek is currently generating about 0.07 per unit of risk. If you would invest  899.00  in Viavi Solutions on May 6, 2025 and sell it today you would earn a total of  102.00  from holding Viavi Solutions or generate 11.35% return on investment over 90 days.

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

Viavi Solutions  vs.  Eltek

Viavi Solutions

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Viavi Solutions are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Viavi Solutions may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Eltek

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eltek are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Eltek may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Viavi Solutions and Eltek

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

The idea behind Viavi Solutions and Eltek 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.