Correlation Between Israel China and B Yair
Can any of the company-specific risk be diversified away by investing in both Israel China and B Yair 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 B Yair 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 B Yair Building, you can compare the effects of market volatilities on Israel China and B Yair 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 B Yair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and B Yair.
Diversification Opportunities for Israel China and B Yair
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Israel and BYAR is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and B Yair Building in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Yair Building 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 B Yair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Yair Building has no effect on the direction of Israel China i.e., Israel China and B Yair go up and down completely randomly.
Pair Corralation between Israel China and B Yair
Assuming the 90 days trading horizon Israel China Biotechnology is expected to under-perform the B Yair. But the stock apears to be less risky and, when comparing its historical volatility, Israel China Biotechnology is 1.37 times less risky than B Yair. The stock trades about -0.06 of its potential returns per unit of risk. The B Yair Building is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 122,800 in B Yair Building on September 3, 2024 and sell it today you would lose (15,200) from holding B Yair Building or give up 12.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel China Biotechnology vs. B Yair Building
Performance |
| Timeline |
| Israel China Biotech |
| B Yair Building |
Israel China and B Yair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel China and B Yair
The main advantage of trading using opposite Israel China and B Yair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel China position performs unexpectedly, B Yair 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 B Yair will offset losses from the drop in B Yair's long position.| Israel China vs. G Willi Food International | Israel China vs. TAT Technologies | Israel China vs. Sarine Technologies | Israel China vs. Clal Biotechnology Industries |
| B Yair vs. Ram On Investments and | B Yair vs. Scope Metals Group | B Yair vs. Israel China Biotechnology | B Yair vs. One Software Technologies |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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