Correlation Between Israel China and Arena Star
Can any of the company-specific risk be diversified away by investing in both Israel China and Arena Star 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 Israel China and Arena Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel China Biotechnology and Arena Star Group, you can compare the effects of market volatilities on Israel China and Arena Star 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 Israel China with a short position of Arena Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and Arena Star.
Diversification Opportunities for Israel China and Arena Star
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Israel and Arena is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and Arena Star Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Star Group and Israel China 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 Israel China Biotechnology are associated (or correlated) with Arena Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Star Group has no effect on the direction of Israel China i.e., Israel China and Arena Star go up and down completely randomly.
Pair Corralation between Israel China and Arena Star
Assuming the 90 days trading horizon Israel China Biotechnology is expected to under-perform the Arena Star. In addition to that, Israel China is 1.67 times more volatile than Arena Star Group. It trades about -0.11 of its total potential returns per unit of risk. Arena Star Group is currently generating about 0.3 per unit of volatility. If you would invest 20,580 in Arena Star Group on September 12, 2024 and sell it today you would earn a total of 2,850 from holding Arena Star Group or generate 13.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel China Biotechnology vs. Arena Star Group
Performance |
| Timeline |
| Israel China Biotech |
| Arena Star Group |
Israel China and Arena Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel China and Arena Star
The main advantage of trading using opposite Israel China and Arena Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel China position performs unexpectedly, Arena Star 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 Arena Star will offset losses from the drop in Arena Star's long position.| Israel China vs. B Communications | Israel China vs. Photomyne | Israel China vs. M Yochananof and | Israel China vs. Clal Biotechnology Industries |
| Arena Star vs. Isras Investment | Arena Star vs. Sella Real Estate | Arena Star vs. Harel Insurance Investments | Arena Star vs. B Communications |
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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