Correlation Between Direct Capital and Meitav Trade
Can any of the company-specific risk be diversified away by investing in both Direct Capital and Meitav Trade 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 Direct Capital and Meitav Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direct Capital Investments and Meitav Trade Inv, you can compare the effects of market volatilities on Direct Capital and Meitav Trade 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 Direct Capital with a short position of Meitav Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direct Capital and Meitav Trade.
Diversification Opportunities for Direct Capital and Meitav Trade
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Direct and Meitav is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Direct Capital Investments and Meitav Trade Inv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meitav Trade Inv and Direct Capital 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 Direct Capital Investments are associated (or correlated) with Meitav Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meitav Trade Inv has no effect on the direction of Direct Capital i.e., Direct Capital and Meitav Trade go up and down completely randomly.
Pair Corralation between Direct Capital and Meitav Trade
Assuming the 90 days trading horizon Direct Capital Investments is expected to generate 6.06 times more return on investment than Meitav Trade. However, Direct Capital is 6.06 times more volatile than Meitav Trade Inv. It trades about 0.15 of its potential returns per unit of risk. Meitav Trade Inv is currently generating about 0.03 per unit of risk. If you would invest 80,000 in Direct Capital Investments on September 13, 2024 and sell it today you would earn a total of 15,000 from holding Direct Capital Investments or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direct Capital Investments vs. Meitav Trade Inv
Performance |
| Timeline |
| Direct Capital Inves |
| Meitav Trade Inv |
Direct Capital and Meitav Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direct Capital and Meitav Trade
The main advantage of trading using opposite Direct Capital and Meitav Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direct Capital position performs unexpectedly, Meitav Trade 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 Meitav Trade will offset losses from the drop in Meitav Trade's long position.| Direct Capital vs. Nice | Direct Capital vs. The Gold Bond | Direct Capital vs. Bank Leumi Le Israel | Direct Capital vs. ICL Israel Chemicals |
| Meitav Trade vs. Nice | Meitav Trade vs. The Gold Bond | Meitav Trade vs. Bank Leumi Le Israel | Meitav Trade vs. ICL Israel Chemicals |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |