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This module allows you to analyze existing cross correlation between Israel Index and Nasdaq. You can compare the effects of market volatilities on Israel Index and Nasdaq 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 Israel Index with a short position of Nasdaq. See also your portfolio center. Please also check ongoing floating volatility patterns of Israel Index and Nasdaq.
|Horizon||30 Days Login to change|
Predicted Return Density
Israel Index vs. Nasdaq
Assuming 30 trading days horizon, Israel Index is expected to generate 2.44 times less return on investment than Nasdaq. But when comparing it to its historical volatility, Israel Index is 1.32 times less risky than Nasdaq. It trades about 0.13 of its potential returns per unit of risk. Nasdaq is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 633,300 in Nasdaq on January 20, 2019 and sell it today you would earn a total of 114,462 from holding Nasdaq or generate 18.07% return on investment over 30 days.
Pair Corralation between Israel Index and Nasdaq
|Time Period||2 Months [change]|
Diversification Opportunities for Israel Index and Nasdaq
Almost no diversification
Overlapping area represents the amount of risk that can be diversified away by holding Israel Index and Nasdaq in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq and Israel Index 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 Israel Index are associated (or correlated) with Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq has no effect on the direction of Israel Index i.e. Israel Index and Nasdaq go up and down completely randomly.