Correlation Between Israel China and Infimer
Can any of the company-specific risk be diversified away by investing in both Israel China and Infimer 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 Infimer 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 Infimer, you can compare the effects of market volatilities on Israel China and Infimer 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 Infimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and Infimer.
Diversification Opportunities for Israel China and Infimer
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Israel and Infimer is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and Infimer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infimer 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 Infimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infimer has no effect on the direction of Israel China i.e., Israel China and Infimer go up and down completely randomly.
Pair Corralation between Israel China and Infimer
Assuming the 90 days trading horizon Israel China is expected to generate 77.82 times less return on investment than Infimer. But when comparing it to its historical volatility, Israel China Biotechnology is 10.77 times less risky than Infimer. It trades about 0.02 of its potential returns per unit of risk. Infimer is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 7,400 in Infimer on August 27, 2024 and sell it today you would lose (7,260) from holding Infimer or give up 98.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel China Biotechnology vs. Infimer
Performance |
| Timeline |
| Israel China Biotech |
| Infimer |
Israel China and Infimer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel China and Infimer
The main advantage of trading using opposite Israel China and Infimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel China position performs unexpectedly, Infimer 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 Infimer will offset losses from the drop in Infimer's long position.| Israel China vs. Terminal X Online | Israel China vs. B Communications | Israel China vs. Magic Software Enterprises | Israel China vs. Gamatronic Electronic Industries |
| Infimer vs. Azorim Investment Development | Infimer vs. Feat Fund Investments | Infimer vs. Willy Food | Infimer vs. Storage Drop Storage |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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