Correlation Between Israel China and Global Knafaim
Can any of the company-specific risk be diversified away by investing in both Israel China and Global Knafaim 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 Global Knafaim 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 Global Knafaim Leasing, you can compare the effects of market volatilities on Israel China and Global Knafaim 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 Global Knafaim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and Global Knafaim.
Diversification Opportunities for Israel China and Global Knafaim
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Israel and Global is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and Global Knafaim Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Knafaim Leasing 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 Global Knafaim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Knafaim Leasing has no effect on the direction of Israel China i.e., Israel China and Global Knafaim go up and down completely randomly.
Pair Corralation between Israel China and Global Knafaim
Assuming the 90 days trading horizon Israel China Biotechnology is expected to generate 1.77 times more return on investment than Global Knafaim. However, Israel China is 1.77 times more volatile than Global Knafaim Leasing. It trades about 0.18 of its potential returns per unit of risk. Global Knafaim Leasing is currently generating about -0.17 per unit of risk. If you would invest 54,000 in Israel China Biotechnology on August 30, 2024 and sell it today you would earn a total of 5,770 from holding Israel China Biotechnology or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Israel China Biotechnology vs. Global Knafaim Leasing
Performance |
| Timeline |
| Israel China Biotech |
| Global Knafaim Leasing |
Israel China and Global Knafaim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel China and Global Knafaim
The main advantage of trading using opposite Israel China and Global Knafaim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel China position performs unexpectedly, Global Knafaim 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 Global Knafaim will offset losses from the drop in Global Knafaim's long position.| Israel China vs. Suny Cellular Communication | Israel China vs. Arad Investment Industrial | Israel China vs. GODM Investments | Israel China vs. Hiron Trade Investments Industrial |
| Global Knafaim vs. Ormat Technologies | Global Knafaim vs. Multi Retail Group | Global Knafaim vs. Nova | Global Knafaim 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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