Correlation Between Hod Assaf and Eldav L

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

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

Diversification Opportunities for Hod Assaf and Eldav L

-0.33

Correlation Coefficient

Hod Assaf  Eldav L

Very good diversification

The 3 months correlation between Hod and Eldav is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hod Assaf Industries and Eldav L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldav L and Hod Assaf 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 Hod Assaf Industries are associated (or correlated) with Eldav L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldav L has no effect on the direction of Hod Assaf i.e., Hod Assaf and Eldav L go up and down completely randomly.

Pair Corralation between Hod Assaf and Eldav L

Assuming the 90 days trading horizon Hod Assaf is expected to generate 26.02 times less return on investment than Eldav L. But when comparing it to its historical volatility, Hod Assaf Industries is 1.51 times less risky than Eldav L. It trades about 0.01 of its potential returns per unit of risk. Eldav L is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  25,010  in Eldav L on December 20, 2024 and sell it today you would earn a total of  2,990  from holding Eldav L or generate 11.96% return on investment over 90 days.

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

Hod Assaf Industries  vs.  Eldav L

Hod Assaf Industries

Risk-Adjusted Performance

Very Weak

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

Eldav L

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eldav L are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Eldav L unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hod Assaf and Eldav L

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

The idea behind Hod Assaf Industries and Eldav L 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.