Correlation Between Israel China and Itay Financial
Can any of the company-specific risk be diversified away by investing in both Israel China and Itay Financial 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 Itay Financial 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 Itay Financial AA, you can compare the effects of market volatilities on Israel China and Itay Financial 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 Itay Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and Itay Financial.
Diversification Opportunities for Israel China and Itay Financial
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Israel and Itay is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and Itay Financial AA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itay Financial AA 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 Itay Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itay Financial AA has no effect on the direction of Israel China i.e., Israel China and Itay Financial go up and down completely randomly.
Pair Corralation between Israel China and Itay Financial
Assuming the 90 days trading horizon Israel China Biotechnology is expected to generate 0.74 times more return on investment than Itay Financial. However, Israel China Biotechnology is 1.34 times less risky than Itay Financial. It trades about 0.27 of its potential returns per unit of risk. Itay Financial AA is currently generating about 0.2 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 | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Israel China Biotechnology vs. Itay Financial AA
Performance |
| Timeline |
| Israel China Biotech |
| Itay Financial AA |
Israel China and Itay Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel China and Itay Financial
The main advantage of trading using opposite Israel China and Itay Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel China position performs unexpectedly, Itay Financial 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 Itay Financial will offset losses from the drop in Itay Financial's long position.| Israel China vs. B Communications | Israel China vs. Nova | Israel China vs. Petrochemical | Israel China vs. Israel Opportunity |
| Itay Financial vs. Direct Capital Investments | Itay Financial vs. Netz Hotels | Itay Financial vs. B Communications | Itay Financial vs. Holmes Place International |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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