Correlation Between Pluristem and Eldav L

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

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

Diversification Opportunities for Pluristem and Eldav L

-0.16

Correlation Coefficient

Pluristem  Eldav L

Good diversification

The 3 months correlation between Pluristem and Eldav is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pluristem and Eldav L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldav L and Pluristem 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 Pluristem are associated (or correlated) with Eldav L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldav L has no effect on the direction of Pluristem i.e., Pluristem and Eldav L go up and down completely randomly.

Pair Corralation between Pluristem and Eldav L

Assuming the 90 days trading horizon Pluristem is expected to under-perform the Eldav L. In addition to that, Pluristem is 1.66 times more volatile than Eldav L. It trades about -0.13 of its total potential returns per unit of risk. Eldav L is currently generating about 0.09 per unit of volatility. If you would invest  24,000  in Eldav L on September 27, 2024 and sell it today you would earn a total of  2,420  from holding Eldav L or generate 10.08% return on investment over 90 days.

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

Pluristem  vs.  Eldav L

Pluristem

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pluristem has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Eldav L

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eldav L are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Eldav L unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pluristem and Eldav L

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

The idea behind Pluristem and Eldav L 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.