Correlation Between Netanel and Mizrahi Tefahot
Can any of the company-specific risk be diversified away by investing in both Netanel 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 Netanel and Mizrahi Tefahot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netanel Group and Mizrahi Tefahot, you can compare the effects of market volatilities on Netanel 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 Netanel with a short position of Mizrahi Tefahot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netanel and Mizrahi Tefahot.
Diversification Opportunities for Netanel and Mizrahi Tefahot
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Netanel and Mizrahi is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Netanel Group and Mizrahi Tefahot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mizrahi Tefahot and Netanel 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 Netanel Group 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 Netanel i.e., Netanel and Mizrahi Tefahot go up and down completely randomly.
Pair Corralation between Netanel and Mizrahi Tefahot
Assuming the 90 days trading horizon Netanel Group is expected to under-perform the Mizrahi Tefahot. But the stock apears to be less risky and, when comparing its historical volatility, Netanel Group is 1.92 times less risky than Mizrahi Tefahot. The stock trades about -0.51 of its potential returns per unit of risk. The Mizrahi Tefahot is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,357,000 in Mizrahi Tefahot on January 24, 2024 and sell it today you would lose (50,000) from holding Mizrahi Tefahot or give up 3.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netanel Group vs. Mizrahi Tefahot
Performance |
| Timeline |
| Netanel Group |
| Mizrahi Tefahot |
Netanel and Mizrahi Tefahot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netanel and Mizrahi Tefahot
The main advantage of trading using opposite Netanel and Mizrahi Tefahot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netanel 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.| Netanel vs. Clal Insurance Enterprises | Netanel vs. Israel Discount Bank | Netanel vs. Bezeq Israeli Telecommunication | Netanel vs. Alony Hetz Properties |
| Mizrahi Tefahot vs. Bank Leumi Le Israel | Mizrahi Tefahot vs. Bank Hapoalim | Mizrahi Tefahot vs. Israel Discount Bank | Mizrahi Tefahot vs. First International Bank |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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