Correlation Between Eltek and BitFuFu Warrant

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

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

Diversification Opportunities for Eltek and BitFuFu Warrant

0.38

Correlation Coefficient

Eltek  BitFuFu Warrant

Weak diversification

The 3 months correlation between Eltek and BitFuFu is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Eltek and BitFuFu Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFuFu Warrant and Eltek 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 Eltek are associated (or correlated) with BitFuFu Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFuFu Warrant has no effect on the direction of Eltek i.e., Eltek and BitFuFu Warrant go up and down completely randomly.

Pair Corralation between Eltek and BitFuFu Warrant

Given the investment horizon of 90 days Eltek is expected to generate 3.75 times less return on investment than BitFuFu Warrant. But when comparing it to its historical volatility, Eltek is 3.07 times less risky than BitFuFu Warrant. It trades about 0.06 of its potential returns per unit of risk. BitFuFu Warrant is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  35.00  in BitFuFu Warrant on October 10, 2024 and sell it today you would earn a total of  25.50  from holding BitFuFu Warrant or generate 72.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	41.41%
Values	Daily Returns

Eltek  vs.  BitFuFu Warrant

Eltek

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eltek are ranked lower than 3 (%) 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.

BitFuFu Warrant

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BitFuFu Warrant are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, BitFuFu Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eltek and BitFuFu Warrant

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

The idea behind Eltek and BitFuFu Warrant 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.