Correlation Between Elbit Systems and Intercure

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

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

Diversification Opportunities for Elbit Systems and Intercure

-0.86

Correlation Coefficient

Elbit Systems  Intercure

Pay attention - limited upside

The 3 months correlation between Elbit and Intercure is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Systems and Intercure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercure and Elbit Systems 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 Elbit Systems are associated (or correlated) with Intercure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercure has no effect on the direction of Elbit Systems i.e., Elbit Systems and Intercure go up and down completely randomly.

Pair Corralation between Elbit Systems and Intercure

Assuming the 90 days trading horizon Elbit Systems is expected to generate 0.42 times more return on investment than Intercure. However, Elbit Systems is 2.37 times less risky than Intercure. It trades about 0.28 of its potential returns per unit of risk. Intercure is currently generating about -0.03 per unit of risk. If you would invest  7,399,308  in Elbit Systems on September 27, 2024 and sell it today you would earn a total of  2,043,692  from holding Elbit Systems or generate 27.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	97.83%
Values	Daily Returns

Elbit Systems  vs.  Intercure

Elbit Systems

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Elbit Systems are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Elbit Systems sustained solid returns over the last few months and may actually be approaching a breakup point.

Intercure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intercure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Elbit Systems and Intercure

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

The idea behind Elbit Systems and Intercure 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..