Correlation Between Arad Investment and Delek
Can any of the company-specific risk be diversified away by investing in both Arad Investment and Delek 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 Delek 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 Delek Group, you can compare the effects of market volatilities on Arad Investment and Delek 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 Delek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arad Investment and Delek.
Diversification Opportunities for Arad Investment and Delek
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arad and Delek is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Arad Investment Industrial and Delek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Group 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 Delek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Group has no effect on the direction of Arad Investment i.e., Arad Investment and Delek go up and down completely randomly.
Pair Corralation between Arad Investment and Delek
Assuming the 90 days trading horizon Arad Investment Industrial is expected to under-perform the Delek. In addition to that, Arad Investment is 1.69 times more volatile than Delek Group. It trades about -0.16 of its total potential returns per unit of risk. Delek Group is currently generating about 0.44 per unit of volatility. If you would invest 5,270,000 in Delek Group on November 27, 2024 and sell it today you would earn a total of 786,000 from holding Delek Group or generate 14.91% 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. Delek Group
Performance |
| Timeline |
| Arad Investment Indu |
| Delek Group |
Arad Investment and Delek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arad Investment and Delek
The main advantage of trading using opposite Arad Investment and Delek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arad Investment position performs unexpectedly, Delek 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 Delek will offset losses from the drop in Delek's long position.| Arad Investment vs. Arad | Arad Investment vs. Alony Hetz Properties | Arad Investment vs. Danel | Arad Investment vs. Airport City |
| Delek vs. Fattal 1998 Holdings | Delek vs. El Al Israel | Delek vs. Bank Leumi Le Israel | Delek vs. Teva Pharmaceutical Industries |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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