Correlation Between YH Dimri and Mizrahi Tefahot
Can any of the company-specific risk be diversified away by investing in both YH Dimri 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 YH Dimri and Mizrahi Tefahot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YH Dimri Construction and Mizrahi Tefahot, you can compare the effects of market volatilities on YH Dimri 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 YH Dimri with a short position of Mizrahi Tefahot. Check out your portfolio center. Please also check ongoing floating volatility patterns of YH Dimri and Mizrahi Tefahot.
Diversification Opportunities for YH Dimri and Mizrahi Tefahot
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DIMRI and Mizrahi is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding YH Dimri Construction and Mizrahi Tefahot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mizrahi Tefahot and YH Dimri 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 YH Dimri Construction 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 YH Dimri i.e., YH Dimri and Mizrahi Tefahot go up and down completely randomly.
Pair Corralation between YH Dimri and Mizrahi Tefahot
Assuming the 90 days trading horizon YH Dimri Construction is expected to generate 0.72 times more return on investment than Mizrahi Tefahot. However, YH Dimri Construction is 1.39 times less risky than Mizrahi Tefahot. It trades about 0.15 of its potential returns per unit of risk. Mizrahi Tefahot is currently generating about -0.02 per unit of risk. If you would invest 2,889,000 in YH Dimri Construction on February 6, 2024 and sell it today you would earn a total of 86,000 from holding YH Dimri Construction or generate 2.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YH Dimri Construction vs. Mizrahi Tefahot
Performance |
| Timeline |
| YH Dimri Construction |
| Mizrahi Tefahot |
YH Dimri and Mizrahi Tefahot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YH Dimri and Mizrahi Tefahot
The main advantage of trading using opposite YH Dimri and Mizrahi Tefahot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YH Dimri 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.| YH Dimri vs. Azrieli Group | YH Dimri vs. Israel Canada | YH Dimri vs. Ashtrom Group | YH Dimri vs. Shikun Binui |
| Mizrahi Tefahot vs. Nice | Mizrahi Tefahot vs. ICL Israel Chemicals | Mizrahi Tefahot vs. Azrieli Group | Mizrahi Tefahot vs. Elbit Systems |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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