Correlation Between Israel China and Discount Investment
Can any of the company-specific risk be diversified away by investing in both Israel China and Discount Investment 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 Discount Investment 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 Discount Investment Corp, you can compare the effects of market volatilities on Israel China and Discount Investment 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 Discount Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and Discount Investment.
Diversification Opportunities for Israel China and Discount Investment
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Israel and Discount is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and Discount Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Discount Investment Corp 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 Discount Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Discount Investment Corp has no effect on the direction of Israel China i.e., Israel China and Discount Investment go up and down completely randomly.
Pair Corralation between Israel China and Discount Investment
Assuming the 90 days trading horizon Israel China Biotechnology is expected to generate 3.43 times more return on investment than Discount Investment. However, Israel China is 3.43 times more volatile than Discount Investment Corp. It trades about 0.03 of its potential returns per unit of risk. Discount Investment Corp is currently generating about 0.04 per unit of risk. If you would invest 70,190 in Israel China Biotechnology on September 12, 2024 and sell it today you would lose (13,830) from holding Israel China Biotechnology or give up 19.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel China Biotechnology vs. Discount Investment Corp
Performance |
| Timeline |
| Israel China Biotech |
| Discount Investment Corp |
Israel China and Discount Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel China and Discount Investment
The main advantage of trading using opposite Israel China and Discount Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel China position performs unexpectedly, Discount Investment 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 Discount Investment will offset losses from the drop in Discount Investment's long position.| Israel China vs. B Communications | Israel China vs. Photomyne | Israel China vs. M Yochananof and | Israel China vs. Clal Biotechnology Industries |
| Discount Investment vs. Aran Research and | Discount Investment vs. Al Bad Massuot Yitzhak | Discount Investment vs. Analyst IMS Investment | Discount Investment vs. Golan Plastic |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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