Correlation Between Israel Discount and Israel Opportunity
Can any of the company-specific risk be diversified away by investing in both Israel Discount and Israel Opportunity 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 Israel Opportunity 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 Israel Opportunity , you can compare the effects of market volatilities on Israel Discount and Israel Opportunity 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 Israel Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Israel Opportunity.
Diversification Opportunities for Israel Discount and Israel Opportunity
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Israel and Israel is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and Israel Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Opportunity 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 Israel Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Opportunity has no effect on the direction of Israel Discount i.e., Israel Discount and Israel Opportunity go up and down completely randomly.
Pair Corralation between Israel Discount and Israel Opportunity
Assuming the 90 days trading horizon Israel Discount Bank is expected to generate 0.42 times more return on investment than Israel Opportunity. However, Israel Discount Bank is 2.37 times less risky than Israel Opportunity. It trades about 0.48 of its potential returns per unit of risk. Israel Opportunity is currently generating about -0.01 per unit of risk. If you would invest 217,819 in Israel Discount Bank on September 1, 2024 and sell it today you would earn a total of 20,781 from holding Israel Discount Bank or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Discount Bank vs. Israel Opportunity
Performance |
| Timeline |
| Israel Discount Bank |
| Israel Opportunity |
Israel Discount and Israel Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and Israel Opportunity
The main advantage of trading using opposite Israel Discount and Israel Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, Israel Opportunity 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 Israel Opportunity will offset losses from the drop in Israel Opportunity's long position.| Israel Discount vs. Menif Financial Services | Israel Discount vs. Accel Solutions Group | Israel Discount vs. Rani Zim Shopping | Israel Discount vs. Rapac Communication Infrastructure |
| Israel Opportunity vs. More Mutual Funds | Israel Opportunity vs. Ram On Investments and | Israel Opportunity vs. B Communications | Israel Opportunity vs. Discount Investment Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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