Correlation Between First International and YD More
Can any of the company-specific risk be diversified away by investing in both First International and YD More 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 First International and YD More into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First International Bank and YD More Investments, you can compare the effects of market volatilities on First International and YD More 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 First International with a short position of YD More. Check out your portfolio center. Please also check ongoing floating volatility patterns of First International and YD More.
Diversification Opportunities for First International and YD More
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and MRIN is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding First International Bank and YD More Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YD More Investments and First International 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 First International Bank are associated (or correlated) with YD More. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YD More Investments has no effect on the direction of First International i.e., First International and YD More go up and down completely randomly.
Pair Corralation between First International and YD More
Assuming the 90 days trading horizon First International Bank is expected to under-perform the YD More. But the stock apears to be less risky and, when comparing its historical volatility, First International Bank is 2.09 times less risky than YD More. The stock trades about -0.17 of its potential returns per unit of risk. The YD More Investments is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 150,800 in YD More Investments on November 18, 2024 and sell it today you would earn a total of 11,800 from holding YD More Investments or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First International Bank vs. YD More Investments
Performance |
| Timeline |
| First International Bank |
| YD More Investments |
First International and YD More Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First International and YD More
The main advantage of trading using opposite First International and YD More positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First International position performs unexpectedly, YD More 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 YD More will offset losses from the drop in YD More's long position.| First International vs. Israel Discount Bank | First International vs. Mizrahi Tefahot | First International vs. Bank Leumi Le Israel | First International vs. Bank Hapoalim |
| YD More vs. Bank Leumi Le Israel | YD More vs. Mizrahi Tefahot | YD More vs. Israel Discount Bank | YD More vs. Bank Hapoalim |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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