Correlation Between Bolt Projects and Eltek

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

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

Diversification Opportunities for Bolt Projects and Eltek

-0.35

Correlation Coefficient

Bolt Projects  Eltek

Very good diversification

The 3 months correlation between Bolt and Eltek is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bolt Projects Holdings, and Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eltek and Bolt Projects 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 Bolt Projects Holdings, 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 Bolt Projects i.e., Bolt Projects and Eltek go up and down completely randomly.

Pair Corralation between Bolt Projects and Eltek

Assuming the 90 days horizon Bolt Projects Holdings, is expected to generate 20.92 times more return on investment than Eltek. However, Bolt Projects is 20.92 times more volatile than Eltek. It trades about 0.1 of its potential returns per unit of risk. Eltek is currently generating about 0.03 per unit of risk. If you would invest  20.00  in Bolt Projects Holdings, on October 9, 2024 and sell it today you would lose (16.00) from holding Bolt Projects Holdings, or give up 80.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.0%
Values	Daily Returns

Bolt Projects Holdings,  vs.  Eltek

Bolt Projects Holdings,

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bolt Projects Holdings, are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward-looking signals, Bolt Projects showed solid returns over the last few months and may actually be approaching a breakup point.

Eltek

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eltek are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Eltek may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bolt Projects and Eltek

The main advantage of trading using opposite Bolt Projects and Eltek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bolt Projects 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 Bolt Projects Holdings, 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.