Correlation Between Edri El and IDI Insurance
Can any of the company-specific risk be diversified away by investing in both Edri El and IDI Insurance 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 Edri El and IDI Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edri El and IDI Insurance, you can compare the effects of market volatilities on Edri El and IDI Insurance 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 Edri El with a short position of IDI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edri El and IDI Insurance.
Diversification Opportunities for Edri El and IDI Insurance
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Edri and IDI is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Edri El and IDI Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDI Insurance and Edri El 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 Edri El are associated (or correlated) with IDI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDI Insurance has no effect on the direction of Edri El i.e., Edri El and IDI Insurance go up and down completely randomly.
Pair Corralation between Edri El and IDI Insurance
Assuming the 90 days trading horizon Edri El is expected to generate 1.07 times less return on investment than IDI Insurance. In addition to that, Edri El is 4.62 times more volatile than IDI Insurance. It trades about 0.05 of its total potential returns per unit of risk. IDI Insurance is currently generating about 0.23 per unit of volatility. If you would invest 965,790 in IDI Insurance on November 3, 2024 and sell it today you would earn a total of 524,210 from holding IDI Insurance or generate 54.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edri El vs. IDI Insurance
Performance |
| Timeline |
| Edri El |
| IDI Insurance |
Edri El and IDI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edri El and IDI Insurance
The main advantage of trading using opposite Edri El and IDI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edri El position performs unexpectedly, IDI Insurance 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 IDI Insurance will offset losses from the drop in IDI Insurance's long position.| Edri El vs. Harel Insurance Investments | Edri El vs. Isras Investment | Edri El vs. RSL Electronics | Edri El vs. B Communications |
| IDI Insurance vs. Migdal Insurance | IDI Insurance vs. Clal Insurance Enterprises | IDI Insurance vs. Bank Hapoalim | IDI Insurance vs. Bank Leumi Le Israel |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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