Correlation Between El Al and Ashot Ashkelon
Can any of the company-specific risk be diversified away by investing in both El Al and Ashot Ashkelon 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 El Al and Ashot Ashkelon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between El Al Israel and Ashot Ashkelon Industries, you can compare the effects of market volatilities on El Al and Ashot Ashkelon 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 El Al with a short position of Ashot Ashkelon. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Al and Ashot Ashkelon.
Diversification Opportunities for El Al and Ashot Ashkelon
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ELAL and Ashot is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding El Al Israel and Ashot Ashkelon Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashot Ashkelon Industries and El Al 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 El Al Israel are associated (or correlated) with Ashot Ashkelon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashot Ashkelon Industries has no effect on the direction of El Al i.e., El Al and Ashot Ashkelon go up and down completely randomly.
Pair Corralation between El Al and Ashot Ashkelon
Assuming the 90 days trading horizon El Al Israel is expected to generate 0.88 times more return on investment than Ashot Ashkelon. However, El Al Israel is 1.14 times less risky than Ashot Ashkelon. It trades about 0.27 of its potential returns per unit of risk. Ashot Ashkelon Industries is currently generating about 0.07 per unit of risk. If you would invest 78,790 in El Al Israel on December 29, 2024 and sell it today you would earn a total of 41,010 from holding El Al Israel or generate 52.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
El Al Israel vs. Ashot Ashkelon Industries
Performance |
Timeline |
El Al Israel |
Ashot Ashkelon Industries |
El Al and Ashot Ashkelon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with El Al and Ashot Ashkelon
The main advantage of trading using opposite El Al and Ashot Ashkelon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Al position performs unexpectedly, Ashot Ashkelon 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 Ashot Ashkelon will offset losses from the drop in Ashot Ashkelon's long position.El Al vs. Delek Group | El Al vs. Teva Pharmaceutical Industries | El Al vs. Fattal 1998 Holdings | El Al vs. Bank Leumi Le Israel |
Ashot Ashkelon vs. Bet Shemesh Engines | Ashot Ashkelon vs. Elbit Systems | Ashot Ashkelon vs. Bezeq Israeli Telecommunication | Ashot Ashkelon vs. Rekah Pharmaceutical Industry |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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