Correlation Between 191219AY0 and Eltek

Can any of the company-specific risk be diversified away by investing in both 191219AY0 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 191219AY0 and Eltek into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COCA A ENTERPRISES and Eltek, you can compare the effects of market volatilities on 191219AY0 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 191219AY0 with a short position of Eltek. Check out your portfolio center. Please also check ongoing floating volatility patterns of 191219AY0 and Eltek.

Diversification Opportunities for 191219AY0 and Eltek

-0.44

Correlation Coefficient

191219AY0  Eltek

Very good diversification

The 3 months correlation between 191219AY0 and Eltek is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding COCA A ENTERPRISES and Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eltek and 191219AY0 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 COCA A ENTERPRISES 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 191219AY0 i.e., 191219AY0 and Eltek go up and down completely randomly.

Pair Corralation between 191219AY0 and Eltek

Assuming the 90 days trading horizon 191219AY0 is expected to generate 2.59 times less return on investment than Eltek. But when comparing it to its historical volatility, COCA A ENTERPRISES is 4.86 times less risky than Eltek. It trades about 0.17 of its potential returns per unit of risk. Eltek is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,102  in Eltek on October 12, 2024 and sell it today you would earn a total of  31.00  from holding Eltek or generate 2.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	75.0%
Values	Daily Returns

COCA A ENTERPRISES  vs.  Eltek

COCA A ENTERPRISES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COCA A ENTERPRISES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 191219AY0 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Eltek

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eltek are ranked lower than 4 (%) 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 191219AY0 and Eltek

The main advantage of trading using opposite 191219AY0 and Eltek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 191219AY0 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 COCA A ENTERPRISES 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 Global Correlations module to find global opportunities by holding instruments from different markets.