Correlation Between Israel Discount and XTL Biopharmaceutica
Can any of the company-specific risk be diversified away by investing in both Israel Discount and XTL Biopharmaceutica 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 XTL Biopharmaceutica 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 XTL Biopharmaceuticals, you can compare the effects of market volatilities on Israel Discount and XTL Biopharmaceutica 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 XTL Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and XTL Biopharmaceutica.
Diversification Opportunities for Israel Discount and XTL Biopharmaceutica
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Israel and XTL is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and XTL Biopharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTL Biopharmaceuticals 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 XTL Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTL Biopharmaceuticals has no effect on the direction of Israel Discount i.e., Israel Discount and XTL Biopharmaceutica go up and down completely randomly.
Pair Corralation between Israel Discount and XTL Biopharmaceutica
Assuming the 90 days trading horizon Israel Discount is expected to generate 4.17 times less return on investment than XTL Biopharmaceutica. But when comparing it to its historical volatility, Israel Discount Bank is 5.2 times less risky than XTL Biopharmaceutica. It trades about 0.07 of its potential returns per unit of risk. XTL Biopharmaceuticals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 370.00 in XTL Biopharmaceuticals on August 28, 2024 and sell it today you would earn a total of 290.00 from holding XTL Biopharmaceuticals or generate 78.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Discount Bank vs. XTL Biopharmaceuticals
Performance |
| Timeline |
| Israel Discount Bank |
| XTL Biopharmaceuticals |
Israel Discount and XTL Biopharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and XTL Biopharmaceutica
The main advantage of trading using opposite Israel Discount and XTL Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, XTL Biopharmaceutica 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 XTL Biopharmaceutica will offset losses from the drop in XTL Biopharmaceutica'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 |
| XTL Biopharmaceutica vs. Nice | XTL Biopharmaceutica vs. The Gold Bond | XTL Biopharmaceutica vs. Bank Leumi Le Israel | XTL Biopharmaceutica 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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