Correlation Between YH Dimri and Michman Basad
Can any of the company-specific risk be diversified away by investing in both YH Dimri and Michman Basad 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 YH Dimri and Michman Basad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YH Dimri Construction and Michman Basad, you can compare the effects of market volatilities on YH Dimri and Michman Basad 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 YH Dimri with a short position of Michman Basad. Check out your portfolio center. Please also check ongoing floating volatility patterns of YH Dimri and Michman Basad.
Diversification Opportunities for YH Dimri and Michman Basad
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DIMRI and Michman is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding YH Dimri Construction and Michman Basad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Michman Basad and YH Dimri 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 YH Dimri Construction are associated (or correlated) with Michman Basad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Michman Basad has no effect on the direction of YH Dimri i.e., YH Dimri and Michman Basad go up and down completely randomly.
Pair Corralation between YH Dimri and Michman Basad
Assuming the 90 days trading horizon YH Dimri Construction is expected to generate 1.78 times more return on investment than Michman Basad. However, YH Dimri is 1.78 times more volatile than Michman Basad. It trades about 0.09 of its potential returns per unit of risk. Michman Basad is currently generating about 0.1 per unit of risk. If you would invest 2,302,360 in YH Dimri Construction on September 12, 2024 and sell it today you would earn a total of 1,379,640 from holding YH Dimri Construction or generate 59.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YH Dimri Construction vs. Michman Basad
Performance |
| Timeline |
| YH Dimri Construction |
| Michman Basad |
YH Dimri and Michman Basad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YH Dimri and Michman Basad
The main advantage of trading using opposite YH Dimri and Michman Basad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YH Dimri position performs unexpectedly, Michman Basad 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 Michman Basad will offset losses from the drop in Michman Basad's long position.| YH Dimri vs. Isras Investment | YH Dimri vs. Sella Real Estate | YH Dimri vs. Harel Insurance Investments | YH Dimri vs. B Communications |
| Michman Basad vs. Itay Financial AA | Michman Basad vs. YH Dimri Construction | Michman Basad vs. Blender Financial Technologies | Michman Basad vs. Clal Insurance Enterprises |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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