Correlation Between Israel China and Israel Shipyards
Can any of the company-specific risk be diversified away by investing in both Israel China and Israel Shipyards 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 Israel Shipyards 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 Israel Shipyards, you can compare the effects of market volatilities on Israel China and Israel Shipyards 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 Israel Shipyards. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and Israel Shipyards.
Diversification Opportunities for Israel China and Israel Shipyards
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Israel and Israel is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and Israel Shipyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Shipyards 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 Israel Shipyards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Shipyards has no effect on the direction of Israel China i.e., Israel China and Israel Shipyards go up and down completely randomly.
Pair Corralation between Israel China and Israel Shipyards
Assuming the 90 days trading horizon Israel China Biotechnology is expected to under-perform the Israel Shipyards. In addition to that, Israel China is 1.64 times more volatile than Israel Shipyards. It trades about -0.1 of its total potential returns per unit of risk. Israel Shipyards is currently generating about 0.06 per unit of volatility. If you would invest 1,145,000 in Israel Shipyards on November 27, 2024 and sell it today you would earn a total of 20,000 from holding Israel Shipyards or generate 1.75% 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. Israel Shipyards
Performance |
| Timeline |
| Israel China Biotech |
| Israel Shipyards |
Israel China and Israel Shipyards Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel China and Israel Shipyards
The main advantage of trading using opposite Israel China and Israel Shipyards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel China position performs unexpectedly, Israel Shipyards 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 Israel Shipyards will offset losses from the drop in Israel Shipyards' long position.| Israel China vs. B Communications | Israel China vs. IDI Insurance | Israel China vs. Scope Metals Group | Israel China vs. Libra Insurance |
| Israel Shipyards vs. Batm Advanced Communications | Israel Shipyards vs. B Communications | Israel Shipyards vs. Harel Insurance Investments | Israel Shipyards vs. Migdal Insurance |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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