Correlation Between Arena Star and Isras Investment
Can any of the company-specific risk be diversified away by investing in both Arena Star and Isras Investment 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 Arena Star and Isras Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arena Star Group and Isras Investment, you can compare the effects of market volatilities on Arena Star and Isras Investment 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 Arena Star with a short position of Isras Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arena Star and Isras Investment.
Diversification Opportunities for Arena Star and Isras Investment
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arena and Isras is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Arena Star Group and Isras Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isras Investment and Arena Star 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 Arena Star Group are associated (or correlated) with Isras Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isras Investment has no effect on the direction of Arena Star i.e., Arena Star and Isras Investment go up and down completely randomly.
Pair Corralation between Arena Star and Isras Investment
Assuming the 90 days trading horizon Arena Star Group is expected to generate 1.96 times more return on investment than Isras Investment. However, Arena Star is 1.96 times more volatile than Isras Investment. It trades about 0.24 of its potential returns per unit of risk. Isras Investment is currently generating about 0.28 per unit of risk. If you would invest 20,800 in Arena Star Group on September 13, 2024 and sell it today you would earn a total of 2,350 from holding Arena Star Group or generate 11.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arena Star Group vs. Isras Investment
Performance |
| Timeline |
| Arena Star Group |
| Isras Investment |
Arena Star and Isras Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arena Star and Isras Investment
The main advantage of trading using opposite Arena Star and Isras Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arena Star position performs unexpectedly, Isras Investment 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 Isras Investment will offset losses from the drop in Isras Investment's long position.| Arena Star vs. Amot Investments | Arena Star vs. Isras Investment | Arena Star vs. Golan Plastic | Arena Star vs. Oron Group Investments |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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