Correlation Between Israel Discount and MeguREIT Israel
Can any of the company-specific risk be diversified away by investing in both Israel Discount and MeguREIT Israel 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 MeguREIT Israel 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 MeguREIT Israel, you can compare the effects of market volatilities on Israel Discount and MeguREIT Israel 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 MeguREIT Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and MeguREIT Israel.
Diversification Opportunities for Israel Discount and MeguREIT Israel
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Israel and MeguREIT is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and MeguREIT Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeguREIT Israel 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 MeguREIT Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeguREIT Israel has no effect on the direction of Israel Discount i.e., Israel Discount and MeguREIT Israel go up and down completely randomly.
Pair Corralation between Israel Discount and MeguREIT Israel
Assuming the 90 days trading horizon Israel Discount is expected to generate 3.25 times less return on investment than MeguREIT Israel. But when comparing it to its historical volatility, Israel Discount Bank is 3.88 times less risky than MeguREIT Israel. It trades about 0.48 of its potential returns per unit of risk. MeguREIT Israel is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 43,210 in MeguREIT Israel on September 1, 2024 and sell it today you would earn a total of 14,220 from holding MeguREIT Israel or generate 32.91% 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. MeguREIT Israel
Performance |
| Timeline |
| Israel Discount Bank |
| MeguREIT Israel |
Israel Discount and MeguREIT Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and MeguREIT Israel
The main advantage of trading using opposite Israel Discount and MeguREIT Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, MeguREIT Israel 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 MeguREIT Israel will offset losses from the drop in MeguREIT Israel'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 |
| MeguREIT Israel vs. Nice | MeguREIT Israel vs. The Gold Bond | MeguREIT Israel vs. Bank Leumi Le Israel | MeguREIT Israel vs. ICL Israel Chemicals |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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