Correlation Between Stratasys and Eltek

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

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

Diversification Opportunities for Stratasys and Eltek

0.5

Correlation Coefficient

Stratasys  Eltek

Very weak diversification

The 3 months correlation between Stratasys and Eltek is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eltek and Stratasys 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 Stratasys are associated (or correlated) with Eltek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eltek has no effect on the direction of Stratasys i.e., Stratasys and Eltek go up and down completely randomly.

Pair Corralation between Stratasys and Eltek

Given the investment horizon of 90 days Stratasys is expected to under-perform the Eltek. In addition to that, Stratasys is 1.71 times more volatile than Eltek. It trades about -0.02 of its total potential returns per unit of risk. Eltek is currently generating about 0.08 per unit of volatility. If you would invest  1,100  in Eltek on October 25, 2024 and sell it today you would earn a total of  25.00  from holding Eltek or generate 2.27% return on investment over 90 days.

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

Stratasys  vs.  Eltek

Stratasys

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stratasys are ranked lower than 9 (%) 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.

Eltek

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eltek are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Eltek may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Stratasys and Eltek

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

The idea behind Stratasys and Eltek 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.