Correlation Between America Great and El Al

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

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

Diversification Opportunities for America Great and El Al

0.54

Correlation Coefficient

America Great  El Al

Very weak diversification

The 3 months correlation between America and ELALF is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding America Great Health 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 America Great 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 America Great Health 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 America Great i.e., America Great and El Al go up and down completely randomly.

Pair Corralation between America Great and El Al

Given the investment horizon of 90 days America Great Health is expected to generate 21.66 times more return on investment than El Al. However, America Great is 21.66 times more volatile than El Al Israel. It trades about 0.17 of its potential returns per unit of risk. El Al Israel is currently generating about 0.18 per unit of risk. If you would invest  0.01  in America Great Health on December 20, 2024 and sell it today you would earn a total of  0.04  from holding America Great Health or generate 400.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

America Great Health  vs.  El Al Israel

America Great Health

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in America Great Health are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, America Great demonstrated solid returns over the last few months and may actually be approaching a breakup point.

El Al Israel

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in El Al Israel are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting essential indicators, El Al reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with America Great and El Al

The main advantage of trading using opposite America Great and El Al positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if America Great 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 America Great Health 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.