Correlation Between Computer Direct and Israel Shipyards
Can any of the company-specific risk be diversified away by investing in both Computer Direct and Israel Shipyards 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 Computer Direct and Israel Shipyards into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computer Direct and Israel Shipyards, you can compare the effects of market volatilities on Computer Direct and Israel Shipyards 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 Computer Direct with a short position of Israel Shipyards. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Direct and Israel Shipyards.
Diversification Opportunities for Computer Direct and Israel Shipyards
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Computer and Israel is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Computer Direct and Israel Shipyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Shipyards and Computer Direct 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 Computer Direct are associated (or correlated) with Israel Shipyards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Shipyards has no effect on the direction of Computer Direct i.e., Computer Direct and Israel Shipyards go up and down completely randomly.
Pair Corralation between Computer Direct and Israel Shipyards
Assuming the 90 days trading horizon Computer Direct is expected to generate 1.03 times more return on investment than Israel Shipyards. However, Computer Direct is 1.03 times more volatile than Israel Shipyards. It trades about 0.26 of its potential returns per unit of risk. Israel Shipyards is currently generating about -0.03 per unit of risk. If you would invest 3,644,000 in Computer Direct on November 22, 2024 and sell it today you would earn a total of 350,000 from holding Computer Direct or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Computer Direct vs. Israel Shipyards
Performance |
| Timeline |
| Computer Direct |
| Israel Shipyards |
Computer Direct and Israel Shipyards Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Direct and Israel Shipyards
The main advantage of trading using opposite Computer Direct and Israel Shipyards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Direct position performs unexpectedly, Israel Shipyards 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 Israel Shipyards will offset losses from the drop in Israel Shipyards' long position.| Computer Direct vs. Matrix | Computer Direct vs. Hilan | Computer Direct vs. One Software Technologies | Computer Direct vs. Atreyu Capital Markets |
| Israel Shipyards vs. Isras Investment | Israel Shipyards vs. Iargento Hi Tech | Israel Shipyards vs. Hiron Trade Investments Industrial | Israel Shipyards 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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