Correlation Between Global Knafaim and First International
Can any of the company-specific risk be diversified away by investing in both Global Knafaim and First International 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 Global Knafaim and First International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Knafaim Leasing and First International Bank, you can compare the effects of market volatilities on Global Knafaim and First International 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 Global Knafaim with a short position of First International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Knafaim and First International.
Diversification Opportunities for Global Knafaim and First International
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and First is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Global Knafaim Leasing and First International Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First International Bank and Global Knafaim 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 Global Knafaim Leasing are associated (or correlated) with First International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First International Bank has no effect on the direction of Global Knafaim i.e., Global Knafaim and First International go up and down completely randomly.
Pair Corralation between Global Knafaim and First International
Assuming the 90 days trading horizon Global Knafaim Leasing is expected to under-perform the First International. In addition to that, Global Knafaim is 1.79 times more volatile than First International Bank. It trades about -0.17 of its total potential returns per unit of risk. First International Bank is currently generating about 0.47 per unit of volatility. If you would invest 1,609,000 in First International Bank on August 28, 2024 and sell it today you would earn a total of 147,000 from holding First International Bank or generate 9.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Knafaim Leasing vs. First International Bank
Performance |
| Timeline |
| Global Knafaim Leasing |
| First International Bank |
Global Knafaim and First International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Knafaim and First International
The main advantage of trading using opposite Global Knafaim and First International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Knafaim position performs unexpectedly, First International 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 First International will offset losses from the drop in First International's long position.| Global Knafaim vs. Arad | Global Knafaim vs. Alony Hetz Properties | Global Knafaim vs. Danel | Global Knafaim vs. Airport City |
| First International vs. Israel Discount Bank | First International vs. Mizrahi Tefahot | First International vs. Bank Leumi Le Israel | First International 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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