Correlation Between Maytronics and El Al

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

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

Diversification Opportunities for Maytronics and El Al

-0.62

Correlation Coefficient

Maytronics  El Al

Excellent diversification

The 3 months correlation between Maytronics and ELAL is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Maytronics and El Al Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Al Israel and Maytronics 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 Maytronics are associated (or correlated) with El Al. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Al Israel has no effect on the direction of Maytronics i.e., Maytronics and El Al go up and down completely randomly.

Pair Corralation between Maytronics and El Al

Assuming the 90 days trading horizon Maytronics is expected to under-perform the El Al. In addition to that, Maytronics is 1.27 times more volatile than El Al Israel. It trades about -0.05 of its total potential returns per unit of risk. El Al Israel is currently generating about 0.09 per unit of volatility. If you would invest  59,520  in El Al Israel on August 31, 2024 and sell it today you would earn a total of  7,480  from holding El Al Israel or generate 12.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.87%
Values	Daily Returns

Maytronics  vs.  El Al Israel

Maytronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maytronics 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 December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

El Al Israel

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in El Al Israel are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, El Al sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maytronics and El Al

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

The idea behind Maytronics and El Al Israel 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.