Correlation Between IMCO Industries and Israel Discount
Can any of the company-specific risk be diversified away by investing in both IMCO Industries and Israel Discount 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 IMCO Industries and Israel Discount into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMCO Industries and Israel Discount Bank, you can compare the effects of market volatilities on IMCO Industries and Israel Discount 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 IMCO Industries with a short position of Israel Discount. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMCO Industries and Israel Discount.
Diversification Opportunities for IMCO Industries and Israel Discount
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IMCO and Israel is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding IMCO Industries and Israel Discount Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Discount Bank and IMCO Industries 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 IMCO Industries are associated (or correlated) with Israel Discount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Discount Bank has no effect on the direction of IMCO Industries i.e., IMCO Industries and Israel Discount go up and down completely randomly.
Pair Corralation between IMCO Industries and Israel Discount
Assuming the 90 days trading horizon IMCO Industries is expected to under-perform the Israel Discount. In addition to that, IMCO Industries is 1.59 times more volatile than Israel Discount Bank. It trades about -0.02 of its total potential returns per unit of risk. Israel Discount Bank is currently generating about 0.0 per unit of volatility. If you would invest 184,821 in Israel Discount Bank on January 20, 2024 and sell it today you would lose (1,321) from holding Israel Discount Bank or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IMCO Industries vs. Israel Discount Bank
Performance |
| Timeline |
| IMCO Industries |
| Israel Discount Bank |
IMCO Industries and Israel Discount Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMCO Industries and Israel Discount
The main advantage of trading using opposite IMCO Industries and Israel Discount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMCO Industries position performs unexpectedly, Israel Discount 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 Israel Discount will offset losses from the drop in Israel Discount's long position.| IMCO Industries vs. Fox Wizel | IMCO Industries vs. FMS Enterprises Migun | IMCO Industries vs. Bet Shemesh Engines | IMCO Industries vs. Analyst IMS Investment |
| Israel Discount vs. Rani Zim Shopping | Israel Discount vs. Accel Solutions Group | Israel Discount vs. Rapac Communication Infrastructure |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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