Correlation Between Israel Discount and ATT
Can any of the company-specific risk be diversified away by investing in both Israel Discount and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Israel Discount and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and ATT.
Diversification Opportunities for Israel Discount and ATT
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Israel and ATT is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Israel Discount i.e., Israel Discount and ATT go up and down completely randomly.
Pair Corralation between Israel Discount and ATT
Assuming the 90 days trading horizon Israel Discount Bank is expected to generate 2.12 times more return on investment than ATT. However, Israel Discount is 2.12 times more volatile than ATT Inc. It trades about 0.05 of its potential returns per unit of risk. ATT Inc is currently generating about -0.04 per unit of risk. If you would invest 177,778 in Israel Discount Bank on January 20, 2024 and sell it today you would earn a total of 5,722 from holding Israel Discount Bank or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Israel Discount Bank vs. ATT Inc
Performance |
| Timeline |
| Israel Discount Bank |
| ATT Inc |
Israel Discount and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and ATT
The main advantage of trading using opposite Israel Discount and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| Israel Discount vs. Rani Zim Shopping | Israel Discount vs. Accel Solutions Group | Israel Discount vs. Rapac Communication Infrastructure |
| ATT vs. Grab Holdings | ATT vs. Cadence Design Systems | ATT vs. Aquagold International | ATT vs. Thrivent High Yield |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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