Correlation Between First International and Nawi Brothers
Can any of the company-specific risk be diversified away by investing in both First International and Nawi Brothers 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 Nawi Brothers 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 Nawi Brothers Group, you can compare the effects of market volatilities on First International and Nawi Brothers 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 Nawi Brothers. Check out your portfolio center. Please also check ongoing floating volatility patterns of First International and Nawi Brothers.
Diversification Opportunities for First International and Nawi Brothers
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Nawi is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding First International Bank and Nawi Brothers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nawi Brothers Group 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 Nawi Brothers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nawi Brothers Group has no effect on the direction of First International i.e., First International and Nawi Brothers go up and down completely randomly.
Pair Corralation between First International and Nawi Brothers
Assuming the 90 days trading horizon First International is expected to generate 2.28 times less return on investment than Nawi Brothers. But when comparing it to its historical volatility, First International Bank is 1.57 times less risky than Nawi Brothers. It trades about 0.15 of its potential returns per unit of risk. Nawi Brothers Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 315,000 in Nawi Brothers Group on September 1, 2024 and sell it today you would earn a total of 21,500 from holding Nawi Brothers Group or generate 6.83% 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. Nawi Brothers Group
Performance |
| Timeline |
| First International Bank |
| Nawi Brothers Group |
First International and Nawi Brothers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First International and Nawi Brothers
The main advantage of trading using opposite First International and Nawi Brothers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First International position performs unexpectedly, Nawi Brothers 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 Nawi Brothers will offset losses from the drop in Nawi Brothers' 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 |
| Nawi Brothers vs. Menif Financial Services | Nawi Brothers vs. Accel Solutions Group | Nawi Brothers vs. Rani Zim Shopping | Nawi Brothers vs. Mivtach Shamir |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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