Correlation Between Elbit Medical and Blender Financial

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

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

Diversification Opportunities for Elbit Medical and Blender Financial

-0.36

Correlation Coefficient

Elbit Medical  Blender Financial

Very good diversification

The 3 months correlation between Elbit and Blender is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Medical Technologies and Blender Financial Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blender Financial and Elbit Medical 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 Elbit Medical Technologies are associated (or correlated) with Blender Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blender Financial has no effect on the direction of Elbit Medical i.e., Elbit Medical and Blender Financial go up and down completely randomly.

Pair Corralation between Elbit Medical and Blender Financial

Assuming the 90 days trading horizon Elbit Medical Technologies is expected to under-perform the Blender Financial. But the stock apears to be less risky and, when comparing its historical volatility, Elbit Medical Technologies is 1.0 times less risky than Blender Financial. The stock trades about -0.19 of its potential returns per unit of risk. The Blender Financial Technologies is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  32,450  in Blender Financial Technologies on October 10, 2024 and sell it today you would earn a total of  8,000  from holding Blender Financial Technologies or generate 24.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Elbit Medical Technologies  vs.  Blender Financial Technologies

Elbit Medical Techno

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elbit Medical Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Blender Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blender Financial Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Blender Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Elbit Medical and Blender Financial

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

The idea behind Elbit Medical Technologies and Blender Financial Technologies 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.