Correlation Between Arad Investment and Lachish
Can any of the company-specific risk be diversified away by investing in both Arad Investment and Lachish 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 Lachish 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 Lachish, you can compare the effects of market volatilities on Arad Investment and Lachish 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 Lachish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arad Investment and Lachish.
Diversification Opportunities for Arad Investment and Lachish
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arad and Lachish is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Arad Investment Industrial and Lachish in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lachish 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 Lachish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lachish has no effect on the direction of Arad Investment i.e., Arad Investment and Lachish go up and down completely randomly.
Pair Corralation between Arad Investment and Lachish
Assuming the 90 days trading horizon Arad Investment Industrial is expected to generate 3.23 times more return on investment than Lachish. However, Arad Investment is 3.23 times more volatile than Lachish. It trades about 0.0 of its potential returns per unit of risk. Lachish is currently generating about -0.01 per unit of risk. If you would invest 4,219,000 in Arad Investment Industrial on September 14, 2024 and sell it today you would lose (2,589,000) from holding Arad Investment Industrial or give up 61.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.48% |
| Values | Daily Returns |
Arad Investment Industrial vs. Lachish
Performance |
| Timeline |
| Arad Investment Indu |
| Lachish |
Arad Investment and Lachish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arad Investment and Lachish
The main advantage of trading using opposite Arad Investment and Lachish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arad Investment position performs unexpectedly, Lachish 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 Lachish will offset losses from the drop in Lachish's long position.| Arad Investment vs. Arad | Arad Investment vs. Alony Hetz Properties | Arad Investment vs. Danel | Arad Investment vs. Airport City |
| Lachish vs. B Yair Building | Lachish vs. Hiron Trade Investments Industrial | Lachish vs. Clal Biotechnology Industries | Lachish vs. Adgar Investments and |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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