Correlation Between Israel China and Epitomee Medical
Can any of the company-specific risk be diversified away by investing in both Israel China and Epitomee Medical 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 Epitomee Medical 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 Epitomee Medical, you can compare the effects of market volatilities on Israel China and Epitomee Medical 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 Epitomee Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and Epitomee Medical.
Diversification Opportunities for Israel China and Epitomee Medical
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Israel and Epitomee is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and Epitomee Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epitomee Medical 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 Epitomee Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epitomee Medical has no effect on the direction of Israel China i.e., Israel China and Epitomee Medical go up and down completely randomly.
Pair Corralation between Israel China and Epitomee Medical
Assuming the 90 days trading horizon Israel China Biotechnology is expected to generate 0.85 times more return on investment than Epitomee Medical. However, Israel China Biotechnology is 1.17 times less risky than Epitomee Medical. It trades about 0.35 of its potential returns per unit of risk. Epitomee Medical is currently generating about -0.24 per unit of risk. If you would invest 50,000 in Israel China Biotechnology on August 25, 2024 and sell it today you would earn a total of 12,000 from holding Israel China Biotechnology or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel China Biotechnology vs. Epitomee Medical
Performance |
| Timeline |
| Israel China Biotech |
| Epitomee Medical |
Israel China and Epitomee Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel China and Epitomee Medical
The main advantage of trading using opposite Israel China and Epitomee Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel China position performs unexpectedly, Epitomee Medical 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 Epitomee Medical will offset losses from the drop in Epitomee Medical'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 |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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