Correlation Between Eltek and Stratasys

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

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

Diversification Opportunities for Eltek and Stratasys

0.16

Correlation Coefficient

Eltek  Stratasys

Average diversification

The 3 months correlation between Eltek and Stratasys is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Eltek and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys 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 Stratasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratasys has no effect on the direction of Eltek i.e., Eltek and Stratasys go up and down completely randomly.

Pair Corralation between Eltek and Stratasys

Given the investment horizon of 90 days Eltek is expected to under-perform the Stratasys. But the stock apears to be less risky and, when comparing its historical volatility, Eltek is 1.16 times less risky than Stratasys. The stock trades about -0.09 of its potential returns per unit of risk. The Stratasys is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  945.00  in Stratasys on December 20, 2024 and sell it today you would earn a total of  100.00  from holding Stratasys or generate 10.58% return on investment over 90 days.

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

Eltek  vs.  Stratasys

Eltek

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eltek has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Stratasys

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stratasys are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Stratasys unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eltek and Stratasys

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

The idea behind Eltek and Stratasys 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.