Correlation Between Israel China and ATT
Can any of the company-specific risk be diversified away by investing in both Israel China 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 China and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel China Biotechnology and ATT Inc, you can compare the effects of market volatilities on Israel China 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 China with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and ATT.
Diversification Opportunities for Israel China and ATT
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Israel and ATT is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Israel China 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 China Biotechnology 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 China i.e., Israel China and ATT go up and down completely randomly.
Pair Corralation between Israel China and ATT
Assuming the 90 days trading horizon Israel China Biotechnology is expected to generate 9.5 times more return on investment than ATT. However, Israel China is 9.5 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 0.09 per unit of risk. If you would invest 73,300 in Israel China Biotechnology on January 24, 2024 and sell it today you would earn a total of 3,700 from holding Israel China Biotechnology or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.21% |
| Values | Daily Returns |
Israel China Biotechnology vs. ATT Inc
Performance |
| Timeline |
| Israel China Biotech |
| ATT Inc |
Israel China and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel China and ATT
The main advantage of trading using opposite Israel China and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel China 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 China vs. Meitav Dash Investments | Israel China vs. Augwind Energy Tech | Israel China vs. Oron Group Investments | Israel China vs. Batm Advanced Communications |
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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