Correlation Between Propert Buil and Elron Electronic

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

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

Diversification Opportunities for Propert Buil and Elron Electronic

-0.35

Correlation Coefficient

Propert Buil  Elron Electronic

Very good diversification

The 3 months correlation between Propert and Elron is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Propert Buil and Elron Electronic Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elron Electronic Ind and Propert Buil 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 Propert Buil are associated (or correlated) with Elron Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elron Electronic Ind has no effect on the direction of Propert Buil i.e., Propert Buil and Elron Electronic go up and down completely randomly.

Pair Corralation between Propert Buil and Elron Electronic

Assuming the 90 days trading horizon Propert Buil is expected to generate 1.02 times more return on investment than Elron Electronic. However, Propert Buil is 1.02 times more volatile than Elron Electronic Industries. It trades about 0.03 of its potential returns per unit of risk. Elron Electronic Industries is currently generating about 0.03 per unit of risk. If you would invest  2,287,922  in Propert Buil on September 3, 2024 and sell it today you would earn a total of  266,078  from holding Propert Buil or generate 11.63% return on investment over 90 days.

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

Propert Buil  vs.  Elron Electronic Industries

Propert Buil

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Propert Buil are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Propert Buil sustained solid returns over the last few months and may actually be approaching a breakup point.

Elron Electronic Ind

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Elron Electronic Industries are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Elron Electronic sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Propert Buil and Elron Electronic

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

The idea behind Propert Buil and Elron Electronic Industries 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.