Correlation Between Bayside Land and Itay Financial
Can any of the company-specific risk be diversified away by investing in both Bayside Land and Itay Financial 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 Bayside Land and Itay Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayside Land and Itay Financial AA, you can compare the effects of market volatilities on Bayside Land and Itay Financial 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 Bayside Land with a short position of Itay Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayside Land and Itay Financial.
Diversification Opportunities for Bayside Land and Itay Financial
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bayside and Itay is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bayside Land and Itay Financial AA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itay Financial AA and Bayside Land 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 Bayside Land are associated (or correlated) with Itay Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itay Financial AA has no effect on the direction of Bayside Land i.e., Bayside Land and Itay Financial go up and down completely randomly.
Pair Corralation between Bayside Land and Itay Financial
Assuming the 90 days trading horizon Bayside Land is expected to under-perform the Itay Financial. But the stock apears to be less risky and, when comparing its historical volatility, Bayside Land is 3.47 times less risky than Itay Financial. The stock trades about -0.02 of its potential returns per unit of risk. The Itay Financial AA is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 29,500 in Itay Financial AA on September 12, 2024 and sell it today you would earn a total of 9,400 from holding Itay Financial AA or generate 31.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayside Land vs. Itay Financial AA
Performance |
| Timeline |
| Bayside Land |
| Itay Financial AA |
Bayside Land and Itay Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayside Land and Itay Financial
The main advantage of trading using opposite Bayside Land and Itay Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayside Land position performs unexpectedly, Itay Financial 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 Itay Financial will offset losses from the drop in Itay Financial's long position.| Bayside Land vs. Sure Tech Investments LP | Bayside Land vs. One Software Technologies | Bayside Land vs. Clal Biotechnology Industries | Bayside Land vs. Rapac Communication Infrastructure |
| Itay Financial vs. Direct Capital Investments | Itay Financial vs. Netz Hotels | Itay Financial vs. Opal Balance | Itay Financial vs. B Communications |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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