Correlation Between Dan Hotels and Israel Shipyards
Can any of the company-specific risk be diversified away by investing in both Dan Hotels 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 Dan Hotels and Israel Shipyards into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dan Hotels and Israel Shipyards, you can compare the effects of market volatilities on Dan Hotels 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 Dan Hotels with a short position of Israel Shipyards. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dan Hotels and Israel Shipyards.
Diversification Opportunities for Dan Hotels and Israel Shipyards
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dan and Israel is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dan Hotels and Israel Shipyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Shipyards and Dan Hotels 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 Dan Hotels 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 Dan Hotels i.e., Dan Hotels and Israel Shipyards go up and down completely randomly.
Pair Corralation between Dan Hotels and Israel Shipyards
Assuming the 90 days trading horizon Dan Hotels is expected to generate 3.22 times less return on investment than Israel Shipyards. In addition to that, Dan Hotels is 1.01 times more volatile than Israel Shipyards. It trades about 0.01 of its total potential returns per unit of risk. Israel Shipyards is currently generating about 0.04 per unit of volatility. If you would invest 778,930 in Israel Shipyards on September 14, 2024 and sell it today you would earn a total of 207,470 from holding Israel Shipyards or generate 26.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dan Hotels vs. Israel Shipyards
Performance |
| Timeline |
| Dan Hotels |
| Israel Shipyards |
Dan Hotels and Israel Shipyards Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dan Hotels and Israel Shipyards
The main advantage of trading using opposite Dan Hotels and Israel Shipyards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dan Hotels 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.| Dan Hotels vs. Itay Financial AA | Dan Hotels vs. Bank Leumi Le Israel | Dan Hotels vs. Harel Insurance Investments | Dan Hotels vs. Discount Investment Corp |
| Israel Shipyards vs. Harel Insurance Investments | Israel Shipyards vs. Alrov Properties Lodgings | Israel Shipyards vs. Amir Marketing and | Israel Shipyards vs. Dan Hotels |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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