Correlation Between Discount Investment and AudioCodes
Can any of the company-specific risk be diversified away by investing in both Discount Investment and AudioCodes 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 AudioCodes 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 AudioCodes, you can compare the effects of market volatilities on Discount Investment and AudioCodes 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 AudioCodes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discount Investment and AudioCodes.
Diversification Opportunities for Discount Investment and AudioCodes
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Discount and AudioCodes is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Discount Investment Corp and AudioCodes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioCodes 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 AudioCodes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AudioCodes has no effect on the direction of Discount Investment i.e., Discount Investment and AudioCodes go up and down completely randomly.
Pair Corralation between Discount Investment and AudioCodes
Assuming the 90 days trading horizon Discount Investment Corp is expected to generate 1.03 times more return on investment than AudioCodes. However, Discount Investment is 1.03 times more volatile than AudioCodes. It trades about 0.17 of its potential returns per unit of risk. AudioCodes is currently generating about -0.08 per unit of risk. If you would invest 42,550 in Discount Investment Corp on September 1, 2024 and sell it today you would earn a total of 4,220 from holding Discount Investment Corp or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Discount Investment Corp vs. AudioCodes
Performance |
| Timeline |
| Discount Investment Corp |
| AudioCodes |
Discount Investment and AudioCodes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discount Investment and AudioCodes
The main advantage of trading using opposite Discount Investment and AudioCodes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discount Investment position performs unexpectedly, AudioCodes 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 AudioCodes will offset losses from the drop in AudioCodes' 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 |
| AudioCodes vs. Nice | AudioCodes vs. Tower Semiconductor | AudioCodes vs. Elbit Systems | AudioCodes vs. Nova |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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