Correlation Between Feat Fund and Arad
Can any of the company-specific risk be diversified away by investing in both Feat Fund and Arad 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 Feat Fund and Arad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Feat Fund Investments and Arad, you can compare the effects of market volatilities on Feat Fund and Arad 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 Feat Fund with a short position of Arad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feat Fund and Arad.
Diversification Opportunities for Feat Fund and Arad
Modest diversification
The 3 months correlation between Feat and Arad is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Feat Fund Investments and Arad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arad and Feat Fund 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 Feat Fund Investments are associated (or correlated) with Arad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arad has no effect on the direction of Feat Fund i.e., Feat Fund and Arad go up and down completely randomly.
Pair Corralation between Feat Fund and Arad
Assuming the 90 days trading horizon Feat Fund is expected to generate 14.86 times less return on investment than Arad. In addition to that, Feat Fund is 2.6 times more volatile than Arad. It trades about 0.0 of its total potential returns per unit of risk. Arad is currently generating about 0.03 per unit of volatility. If you would invest 442,633 in Arad on September 14, 2024 and sell it today you would earn a total of 63,667 from holding Arad or generate 14.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Feat Fund Investments vs. Arad
Performance |
| Timeline |
| Feat Fund Investments |
| Arad |
Feat Fund and Arad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feat Fund and Arad
The main advantage of trading using opposite Feat Fund and Arad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feat Fund position performs unexpectedly, Arad 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 Arad will offset losses from the drop in Arad's long position.| Feat Fund vs. Nice | Feat Fund vs. The Gold Bond | Feat Fund vs. Bank Leumi Le Israel | Feat Fund vs. ICL Israel Chemicals |
| Arad vs. Teva Pharmaceutical Industries | Arad vs. Elbit Systems | Arad vs. Nice | Arad vs. Bezeq Israeli Telecommunication |
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 Stocks Directory module to find actively traded stocks across global markets.
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