Correlation Between Eltek and Gap,

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

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

Diversification Opportunities for Eltek and Gap,

0.18

Correlation Coefficient

Eltek  Gap,

Average diversification

The 3 months correlation between Eltek and Gap, is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Eltek and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and Eltek 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 Eltek are associated (or correlated) with Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of Eltek i.e., Eltek and Gap, go up and down completely randomly.

Pair Corralation between Eltek and Gap,

Given the investment horizon of 90 days Eltek is expected to generate 5.7 times less return on investment than Gap,. But when comparing it to its historical volatility, Eltek is 1.11 times less risky than Gap,. It trades about 0.03 of its potential returns per unit of risk. The Gap, is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,039  in The Gap, on September 12, 2024 and sell it today you would earn a total of  495.00  from holding The Gap, or generate 24.28% return on investment over 90 days.

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

Eltek  vs.  The Gap,

Eltek

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eltek are ranked lower than 2 (%) 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.

Gap,

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eltek and Gap,

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

The idea behind Eltek and The Gap, 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 CEOs Directory module to screen CEOs from public companies around the world.