Correlation Between Salomon A and First International
Can any of the company-specific risk be diversified away by investing in both Salomon A and First International 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 Salomon A and First International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salomon A Angel and First International Bank, you can compare the effects of market volatilities on Salomon A and First International 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 Salomon A with a short position of First International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salomon A and First International.
Diversification Opportunities for Salomon A and First International
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salomon and First is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Salomon A Angel and First International Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First International Bank and Salomon A 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 Salomon A Angel are associated (or correlated) with First International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First International Bank has no effect on the direction of Salomon A i.e., Salomon A and First International go up and down completely randomly.
Pair Corralation between Salomon A and First International
Assuming the 90 days trading horizon Salomon A Angel is expected to generate 3.18 times more return on investment than First International. However, Salomon A is 3.18 times more volatile than First International Bank. It trades about 0.28 of its potential returns per unit of risk. First International Bank is currently generating about 0.15 per unit of risk. If you would invest 310,000 in Salomon A Angel on September 1, 2024 and sell it today you would earn a total of 54,200 from holding Salomon A Angel or generate 17.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salomon A Angel vs. First International Bank
Performance |
| Timeline |
| Salomon A Angel |
| First International Bank |
Salomon A and First International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salomon A and First International
The main advantage of trading using opposite Salomon A and First International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salomon A position performs unexpectedly, First International 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 First International will offset losses from the drop in First International's long position.| Salomon A vs. Kerur Holdings | Salomon A vs. Sano Brunos Enterprises | Salomon A vs. Al Bad Massuot Yitzhak |
| First International vs. Israel Discount Bank | First International vs. Mizrahi Tefahot | First International vs. Bank Leumi Le Israel | First International vs. Bank Hapoalim |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |