Correlation Between Baran and Mizrahi Tefahot
Can any of the company-specific risk be diversified away by investing in both Baran and Mizrahi Tefahot 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 Baran and Mizrahi Tefahot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baran Group and Mizrahi Tefahot, you can compare the effects of market volatilities on Baran and Mizrahi Tefahot 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 Baran with a short position of Mizrahi Tefahot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baran and Mizrahi Tefahot.
Diversification Opportunities for Baran and Mizrahi Tefahot
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baran and Mizrahi is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Baran Group and Mizrahi Tefahot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mizrahi Tefahot and Baran 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 Baran Group are associated (or correlated) with Mizrahi Tefahot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mizrahi Tefahot has no effect on the direction of Baran i.e., Baran and Mizrahi Tefahot go up and down completely randomly.
Pair Corralation between Baran and Mizrahi Tefahot
Assuming the 90 days trading horizon Baran Group is expected to generate 0.97 times more return on investment than Mizrahi Tefahot. However, Baran Group is 1.03 times less risky than Mizrahi Tefahot. It trades about 0.05 of its potential returns per unit of risk. Mizrahi Tefahot is currently generating about 0.03 per unit of risk. If you would invest 93,900 in Baran Group on January 19, 2024 and sell it today you would earn a total of 16,300 from holding Baran Group or generate 17.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baran Group vs. Mizrahi Tefahot
Performance |
| Timeline |
| Baran Group |
| Mizrahi Tefahot |
Baran and Mizrahi Tefahot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baran and Mizrahi Tefahot
The main advantage of trading using opposite Baran and Mizrahi Tefahot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baran position performs unexpectedly, Mizrahi Tefahot 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 Mizrahi Tefahot will offset losses from the drop in Mizrahi Tefahot's long position.| Baran vs. EN Shoham Business | Baran vs. Accel Solutions Group | Baran vs. Mivtach Shamir | Baran vs. Rani Zim Shopping |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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