Correlation Between Israel Discount and Adgar Investments
Can any of the company-specific risk be diversified away by investing in both Israel Discount and Adgar 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 Israel Discount and Adgar Investments 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 Adgar Investments and, you can compare the effects of market volatilities on Israel Discount and Adgar 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 Israel Discount with a short position of Adgar Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Adgar Investments.
Diversification Opportunities for Israel Discount and Adgar Investments
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Israel and Adgar is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and Adgar Investments and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adgar Investments 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 Adgar Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adgar Investments has no effect on the direction of Israel Discount i.e., Israel Discount and Adgar Investments go up and down completely randomly.
Pair Corralation between Israel Discount and Adgar Investments
Assuming the 90 days trading horizon Israel Discount Bank is expected to generate 0.69 times more return on investment than Adgar Investments. However, Israel Discount Bank is 1.44 times less risky than Adgar Investments. It trades about 0.88 of its potential returns per unit of risk. Adgar Investments and is currently generating about 0.43 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Discount Bank vs. Adgar Investments and
Performance |
| Timeline |
| Israel Discount Bank |
| Adgar Investments |
Israel Discount and Adgar Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and Adgar Investments
The main advantage of trading using opposite Israel Discount and Adgar Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, Adgar 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 Adgar Investments will offset losses from the drop in Adgar Investments' long position.| Israel Discount vs. Elbit Systems | Israel Discount vs. Discount Investment Corp | Israel Discount vs. Clal Insurance Enterprises | Israel Discount vs. AudioCodes |
| Adgar Investments vs. Israel Canada | Adgar Investments vs. Azrieli Group | Adgar Investments vs. Delek Group | Adgar Investments vs. Israel Discount Bank |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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