Correlation Between IBI Inv and Scope Metals
Can any of the company-specific risk be diversified away by investing in both IBI Inv and Scope Metals 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 IBI Inv and Scope Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBI Inv House and Scope Metals Group, you can compare the effects of market volatilities on IBI Inv and Scope Metals 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 IBI Inv with a short position of Scope Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBI Inv and Scope Metals.
Diversification Opportunities for IBI Inv and Scope Metals
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IBI and Scope is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding IBI Inv House and Scope Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scope Metals Group and IBI Inv 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 IBI Inv House are associated (or correlated) with Scope Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scope Metals Group has no effect on the direction of IBI Inv i.e., IBI Inv and Scope Metals go up and down completely randomly.
Pair Corralation between IBI Inv and Scope Metals
Assuming the 90 days trading horizon IBI Inv is expected to generate 1.22 times less return on investment than Scope Metals. But when comparing it to its historical volatility, IBI Inv House is 1.93 times less risky than Scope Metals. It trades about 0.65 of its potential returns per unit of risk. Scope Metals Group is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 1,165,000 in Scope Metals Group on August 28, 2024 and sell it today you would earn a total of 253,000 from holding Scope Metals Group or generate 21.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IBI Inv House vs. Scope Metals Group
Performance |
| Timeline |
| IBI Inv House |
| Scope Metals Group |
IBI Inv and Scope Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBI Inv and Scope Metals
The main advantage of trading using opposite IBI Inv and Scope Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBI Inv position performs unexpectedly, Scope Metals 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 Scope Metals will offset losses from the drop in Scope Metals' long position.| IBI Inv vs. Bank Hapoalim | IBI Inv vs. Israel Discount Bank | IBI Inv vs. Bezeq Israeli Telecommunication | IBI Inv vs. Elbit Systems |
| Scope Metals vs. Delek Automotive Systems | Scope Metals vs. Kerur Holdings | Scope Metals vs. Neto ME Holdings | Scope Metals vs. Bank Leumi Le Israel |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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