Correlation Between Discount Investment and IBI Inv
Can any of the company-specific risk be diversified away by investing in both Discount Investment and IBI Inv 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 IBI Inv 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 IBI Inv House, you can compare the effects of market volatilities on Discount Investment and IBI Inv 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 IBI Inv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discount Investment and IBI Inv.
Diversification Opportunities for Discount Investment and IBI Inv
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Discount and IBI is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Discount Investment Corp and IBI Inv House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBI Inv House 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 IBI Inv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBI Inv House has no effect on the direction of Discount Investment i.e., Discount Investment and IBI Inv go up and down completely randomly.
Pair Corralation between Discount Investment and IBI Inv
Assuming the 90 days trading horizon Discount Investment is expected to generate 2.53 times less return on investment than IBI Inv. In addition to that, Discount Investment is 1.64 times more volatile than IBI Inv House. It trades about 0.04 of its total potential returns per unit of risk. IBI Inv House is currently generating about 0.18 per unit of volatility. If you would invest 835,465 in IBI Inv House on September 1, 2024 and sell it today you would earn a total of 753,535 from holding IBI Inv House or generate 90.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Discount Investment Corp vs. IBI Inv House
Performance |
| Timeline |
| Discount Investment Corp |
| IBI Inv House |
Discount Investment and IBI Inv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discount Investment and IBI Inv
The main advantage of trading using opposite Discount Investment and IBI Inv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discount Investment position performs unexpectedly, IBI Inv 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 IBI Inv will offset losses from the drop in IBI Inv's 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 |
| IBI Inv vs. Harel Insurance Investments | IBI Inv vs. Teuza A Fairchild | IBI Inv vs. IDI Insurance | IBI Inv vs. Rapac Communication Infrastructure |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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