Correlation Between Israel China and Delek Automotive
Can any of the company-specific risk be diversified away by investing in both Israel China and Delek Automotive 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 Delek Automotive 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 Delek Automotive Systems, you can compare the effects of market volatilities on Israel China and Delek Automotive 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 Delek Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and Delek Automotive.
Diversification Opportunities for Israel China and Delek Automotive
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Israel and Delek is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and Delek Automotive Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Automotive Systems 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 Delek Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Automotive Systems has no effect on the direction of Israel China i.e., Israel China and Delek Automotive go up and down completely randomly.
Pair Corralation between Israel China and Delek Automotive
Assuming the 90 days trading horizon Israel China Biotechnology is expected to generate 1.66 times more return on investment than Delek Automotive. However, Israel China is 1.66 times more volatile than Delek Automotive Systems. It trades about 0.28 of its potential returns per unit of risk. Delek Automotive Systems is currently generating about 0.41 per unit of risk. If you would invest 50,000 in Israel China Biotechnology on August 29, 2024 and sell it today you would earn a total of 9,900 from holding Israel China Biotechnology or generate 19.8% 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. Delek Automotive Systems
Performance |
| Timeline |
| Israel China Biotech |
| Delek Automotive Systems |
Israel China and Delek Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel China and Delek Automotive
The main advantage of trading using opposite Israel China and Delek Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel China position performs unexpectedly, Delek Automotive 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 Delek Automotive will offset losses from the drop in Delek Automotive's long position.| Israel China vs. Brainsway | Israel China vs. Mivne Real Estate | Israel China vs. Israel Land Development | Israel China vs. Bezeq Israeli Telecommunication |
| Delek Automotive vs. Direct Capital Investments | Delek Automotive vs. Safe T Group | Delek Automotive vs. Israel China Biotechnology | Delek Automotive vs. Biomedix Incubator |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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