Correlation Between MBGGR and Eltek

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

By analyzing existing cross correlation between MBGGR 33 19 MAY 25 and Eltek, you can compare the effects of market volatilities on MBGGR 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 MBGGR with a short position of Eltek. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBGGR and Eltek.

Diversification Opportunities for MBGGR and Eltek

0.39

Correlation Coefficient

MBGGR  Eltek

Weak diversification

The 3 months correlation between MBGGR and Eltek is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding MBGGR 33 19 MAY 25 and Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eltek and MBGGR 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 MBGGR 33 19 MAY 25 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 MBGGR i.e., MBGGR and Eltek go up and down completely randomly.

Pair Corralation between MBGGR and Eltek

Assuming the 90 days trading horizon MBGGR 33 19 MAY 25 is expected to generate 0.22 times more return on investment than Eltek. However, MBGGR 33 19 MAY 25 is 4.57 times less risky than Eltek. It trades about -0.28 of its potential returns per unit of risk. Eltek is currently generating about -0.1 per unit of risk. If you would invest  9,934  in MBGGR 33 19 MAY 25 on October 6, 2024 and sell it today you would lose (195.00) from holding MBGGR 33 19 MAY 25 or give up 1.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	55.0%
Values	Daily Returns

MBGGR 33 19 MAY 25  vs.  Eltek

MBGGR 33 19

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MBGGR 33 19 MAY 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MBGGR 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

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eltek are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Eltek is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with MBGGR and Eltek

The main advantage of trading using opposite MBGGR and Eltek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBGGR 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 MBGGR 33 19 MAY 25 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.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.