Correlation Between Arad Investment and YH Dimri
Can any of the company-specific risk be diversified away by investing in both Arad Investment and YH Dimri 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 Arad Investment and YH Dimri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arad Investment Industrial and YH Dimri Construction, you can compare the effects of market volatilities on Arad Investment and YH Dimri 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 Arad Investment with a short position of YH Dimri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arad Investment and YH Dimri.
Diversification Opportunities for Arad Investment and YH Dimri
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arad and DIMRI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Arad Investment Industrial and YH Dimri Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YH Dimri Construction and Arad Investment 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 Arad Investment Industrial are associated (or correlated) with YH Dimri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YH Dimri Construction has no effect on the direction of Arad Investment i.e., Arad Investment and YH Dimri go up and down completely randomly.
Pair Corralation between Arad Investment and YH Dimri
Assuming the 90 days trading horizon Arad Investment Industrial is expected to generate 1.9 times more return on investment than YH Dimri. However, Arad Investment is 1.9 times more volatile than YH Dimri Construction. It trades about 0.56 of its potential returns per unit of risk. YH Dimri Construction is currently generating about 0.26 per unit of risk. If you would invest 946,000 in Arad Investment Industrial on August 29, 2024 and sell it today you would earn a total of 397,000 from holding Arad Investment Industrial or generate 41.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arad Investment Industrial vs. YH Dimri Construction
Performance |
| Timeline |
| Arad Investment Indu |
| YH Dimri Construction |
Arad Investment and YH Dimri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arad Investment and YH Dimri
The main advantage of trading using opposite Arad Investment and YH Dimri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arad Investment position performs unexpectedly, YH Dimri 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 YH Dimri will offset losses from the drop in YH Dimri's long position.| Arad Investment vs. Arad | Arad Investment vs. Alony Hetz Properties | Arad Investment vs. Danel | Arad Investment vs. Airport City |
| YH Dimri vs. Azrieli Group | YH Dimri vs. Israel Canada | YH Dimri vs. Ashtrom Group | YH Dimri vs. Shikun Binui |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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