Correlation Between Israel Discount and Export Inv
Can any of the company-specific risk be diversified away by investing in both Israel Discount and Export Inv 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 Israel Discount and Export Inv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Discount Bank and Export Inv, you can compare the effects of market volatilities on Israel Discount and Export Inv 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 Discount with a short position of Export Inv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Export Inv.
Diversification Opportunities for Israel Discount and Export Inv
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Israel and Export is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and Export Inv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Export Inv and Israel Discount 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 Discount Bank are associated (or correlated) with Export Inv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Export Inv has no effect on the direction of Israel Discount i.e., Israel Discount and Export Inv go up and down completely randomly.
Pair Corralation between Israel Discount and Export Inv
Assuming the 90 days trading horizon Israel Discount Bank is expected to generate 1.17 times more return on investment than Export Inv. However, Israel Discount is 1.17 times more volatile than Export Inv. It trades about 0.01 of its potential returns per unit of risk. Export Inv is currently generating about 0.01 per unit of risk. If you would invest 183,027 in Israel Discount Bank on January 16, 2024 and sell it today you would earn a total of 1,973 from holding Israel Discount Bank or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Discount Bank vs. Export Inv
Performance |
| Timeline |
| Israel Discount Bank |
| Export Inv |
Israel Discount and Export Inv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and Export Inv
The main advantage of trading using opposite Israel Discount and Export Inv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, Export Inv 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 Export Inv will offset losses from the drop in Export Inv's long position.| Israel Discount vs. Bank Leumi Le Israel | Israel Discount vs. Bank Hapoalim | Israel Discount vs. Mizrahi Tefahot | Israel Discount vs. Bezeq Israeli Telecommunication |
| Export Inv vs. Analyst IMS Investment | Export Inv vs. First International Bank | Export Inv vs. Eldav L | Export Inv vs. Salomon A Angel |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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