Correlation Between Israel Discount and Abra Information
Can any of the company-specific risk be diversified away by investing in both Israel Discount and Abra Information 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 Israel Discount and Abra Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Discount Bank and Abra Information Technologies, you can compare the effects of market volatilities on Israel Discount and Abra Information 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 Israel Discount with a short position of Abra Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Abra Information.
Diversification Opportunities for Israel Discount and Abra Information
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Israel and Abra is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and Abra Information Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abra Information Tec and Israel Discount 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 Israel Discount Bank are associated (or correlated) with Abra Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abra Information Tec has no effect on the direction of Israel Discount i.e., Israel Discount and Abra Information go up and down completely randomly.
Pair Corralation between Israel Discount and Abra Information
Assuming the 90 days trading horizon Israel Discount Bank is expected to generate 0.43 times more return on investment than Abra Information. However, Israel Discount Bank is 2.32 times less risky than Abra Information. It trades about 0.93 of its potential returns per unit of risk. Abra Information Technologies is currently generating about -0.44 per unit of risk. If you would invest 214,800 in Israel Discount Bank on August 29, 2024 and sell it today you would earn a total of 33,500 from holding Israel Discount Bank or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Discount Bank vs. Abra Information Technologies
Performance |
| Timeline |
| Israel Discount Bank |
| Abra Information Tec |
Israel Discount and Abra Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and Abra Information
The main advantage of trading using opposite Israel Discount and Abra Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, Abra Information 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 Abra Information will offset losses from the drop in Abra Information's long position.| Israel Discount vs. Bank Leumi Le Israel | Israel Discount vs. Bank Hapoalim | Israel Discount vs. Mizrahi Tefahot | Israel Discount vs. Bezeq Israeli Telecommunication |
| Abra Information vs. Seach Medical Group | Abra Information vs. B Communications | Abra Information vs. Migdal Insurance | Abra Information vs. Amanet Management Systems |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |