Correlation Between Discount Investment and Amot Investments
Can any of the company-specific risk be diversified away by investing in both Discount Investment and Amot Investments 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 Discount Investment and Amot Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discount Investment Corp and Amot Investments, you can compare the effects of market volatilities on Discount Investment and Amot Investments 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 Discount Investment with a short position of Amot Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discount Investment and Amot Investments.
Diversification Opportunities for Discount Investment and Amot Investments
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Discount and Amot is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Discount Investment Corp and Amot Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amot Investments and Discount Investment 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 Discount Investment Corp are associated (or correlated) with Amot Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amot Investments has no effect on the direction of Discount Investment i.e., Discount Investment and Amot Investments go up and down completely randomly.
Pair Corralation between Discount Investment and Amot Investments
Assuming the 90 days trading horizon Discount Investment Corp is expected to under-perform the Amot Investments. In addition to that, Discount Investment is 1.71 times more volatile than Amot Investments. It trades about -0.01 of its total potential returns per unit of risk. Amot Investments is currently generating about 0.01 per unit of volatility. If you would invest 202,323 in Amot Investments on August 25, 2024 and sell it today you would lose (6,323) from holding Amot Investments or give up 3.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Discount Investment Corp vs. Amot Investments
Performance |
| Timeline |
| Discount Investment Corp |
| Amot Investments |
Discount Investment and Amot Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discount Investment and Amot Investments
The main advantage of trading using opposite Discount Investment and Amot Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discount Investment position performs unexpectedly, Amot Investments 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 Amot Investments will offset losses from the drop in Amot Investments' long position.| Discount Investment vs. Clal Insurance Enterprises | Discount Investment vs. Israel Discount Bank | Discount Investment vs. Migdal Insurance | Discount Investment vs. Bezeq Israeli Telecommunication |
| Amot Investments vs. Israel Canada | Amot Investments vs. Azrieli Group | Amot Investments vs. Delek Group | Amot Investments vs. Shikun Binui |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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