Correlation Between Discount Investment and Meitav Dash
Can any of the company-specific risk be diversified away by investing in both Discount Investment and Meitav Dash 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 Meitav Dash 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 Meitav Dash Investments, you can compare the effects of market volatilities on Discount Investment and Meitav Dash 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 Meitav Dash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discount Investment and Meitav Dash.
Diversification Opportunities for Discount Investment and Meitav Dash
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Discount and Meitav is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Discount Investment Corp and Meitav Dash Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meitav Dash 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 Meitav Dash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meitav Dash Investments has no effect on the direction of Discount Investment i.e., Discount Investment and Meitav Dash go up and down completely randomly.
Pair Corralation between Discount Investment and Meitav Dash
Assuming the 90 days trading horizon Discount Investment is expected to generate 2.02 times less return on investment than Meitav Dash. In addition to that, Discount Investment is 1.29 times more volatile than Meitav Dash Investments. It trades about 0.29 of its total potential returns per unit of risk. Meitav Dash Investments is currently generating about 0.76 per unit of volatility. If you would invest 191,200 in Meitav Dash Investments on August 29, 2024 and sell it today you would earn a total of 88,500 from holding Meitav Dash Investments or generate 46.29% 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. Meitav Dash Investments
Performance |
| Timeline |
| Discount Investment Corp |
| Meitav Dash Investments |
Discount Investment and Meitav Dash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discount Investment and Meitav Dash
The main advantage of trading using opposite Discount Investment and Meitav Dash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discount Investment position performs unexpectedly, Meitav Dash 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 Dash will offset losses from the drop in Meitav Dash'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 |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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