Correlation Between First International and Safe T
Can any of the company-specific risk be diversified away by investing in both First International and Safe T 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 Safe T 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 Safe T Group, you can compare the effects of market volatilities on First International and Safe T 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 Safe T. Check out your portfolio center. Please also check ongoing floating volatility patterns of First International and Safe T.
Diversification Opportunities for First International and Safe T
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Safe is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding First International Bank and Safe T Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe T 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 Safe T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe T Group has no effect on the direction of First International i.e., First International and Safe T go up and down completely randomly.
Pair Corralation between First International and Safe T
Assuming the 90 days trading horizon First International Bank is expected to generate 0.26 times more return on investment than Safe T. However, First International Bank is 3.91 times less risky than Safe T. It trades about 0.15 of its potential returns per unit of risk. Safe T Group is currently generating about -0.03 per unit of risk. If you would invest 1,663,000 in First International Bank on September 1, 2024 and sell it today you would earn a total of 49,000 from holding First International Bank or generate 2.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First International Bank vs. Safe T Group
Performance |
| Timeline |
| First International Bank |
| Safe T Group |
First International and Safe T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First International and Safe T
The main advantage of trading using opposite First International and Safe T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First International position performs unexpectedly, Safe T 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 Safe T will offset losses from the drop in Safe T'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 |
| Safe T vs. Clal Insurance Enterprises | Safe T vs. First International Bank | Safe T vs. IDI Insurance | Safe T vs. Gilat Telecom Global |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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