Correlation Between Meitav Dash and Allmed Solutions

Can any of the company-specific risk be diversified away by investing in both Meitav Dash and Allmed Solutions 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 Meitav Dash and Allmed Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Meitav Dash Investments and Allmed Solutions, you can compare the effects of market volatilities on Meitav Dash and Allmed Solutions 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 Meitav Dash with a short position of Allmed Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meitav Dash and Allmed Solutions.

Diversification Opportunities for Meitav Dash and Allmed Solutions

0.4

Correlation Coefficient

Meitav Dash  Allmed Solutions

Very weak diversification

The 3 months correlation between Meitav and Allmed is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Meitav Dash Investments and Allmed Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allmed Solutions and Meitav Dash 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 Meitav Dash Investments are associated (or correlated) with Allmed Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allmed Solutions has no effect on the direction of Meitav Dash i.e., Meitav Dash and Allmed Solutions go up and down completely randomly.

Pair Corralation between Meitav Dash and Allmed Solutions

Assuming the 90 days trading horizon Meitav Dash Investments is expected to generate 0.89 times more return on investment than Allmed Solutions. However, Meitav Dash Investments is 1.12 times less risky than Allmed Solutions. It trades about 0.06 of its potential returns per unit of risk. Allmed Solutions is currently generating about -0.23 per unit of risk. If you would invest  160,000  in Meitav Dash Investments on January 29, 2024 and sell it today you would earn a total of  5,300  from holding Meitav Dash Investments or generate 3.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Meitav Dash Investments  vs.  Allmed Solutions

Meitav Dash Investments

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Meitav Dash Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Meitav Dash may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Allmed Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allmed Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Allmed Solutions is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Meitav Dash and Allmed Solutions

The main advantage of trading using opposite Meitav Dash and Allmed Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meitav Dash position performs unexpectedly, Allmed Solutions 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 Allmed Solutions will offset losses from the drop in Allmed Solutions' long position.

The idea behind Meitav Dash Investments and Allmed Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.