Correlation Between Israel China and Libra Insurance
Can any of the company-specific risk be diversified away by investing in both Israel China and Libra Insurance 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 Libra Insurance 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 Libra Insurance, you can compare the effects of market volatilities on Israel China and Libra Insurance 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 Libra Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and Libra Insurance.
Diversification Opportunities for Israel China and Libra Insurance
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Israel and Libra is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and Libra Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libra Insurance 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 Libra Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libra Insurance has no effect on the direction of Israel China i.e., Israel China and Libra Insurance go up and down completely randomly.
Pair Corralation between Israel China and Libra Insurance
Assuming the 90 days trading horizon Israel China Biotechnology is expected to under-perform the Libra Insurance. In addition to that, Israel China is 1.21 times more volatile than Libra Insurance. It trades about -0.09 of its total potential returns per unit of risk. Libra Insurance is currently generating about 0.11 per unit of volatility. If you would invest 100,700 in Libra Insurance on November 29, 2024 and sell it today you would earn a total of 5,600 from holding Libra Insurance or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel China Biotechnology vs. Libra Insurance
Performance |
| Timeline |
| Israel China Biotech |
| Libra Insurance |
Israel China and Libra Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel China and Libra Insurance
The main advantage of trading using opposite Israel China and Libra Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel China position performs unexpectedly, Libra Insurance 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 Libra Insurance will offset losses from the drop in Libra Insurance's long position.| Israel China vs. Clal Insurance Enterprises | Israel China vs. G Willi Food International | Israel China vs. Millennium Food Tech LP | Israel China vs. Arad Investment Industrial |
| Libra Insurance vs. Willy Food | Libra Insurance vs. Magic Software Enterprises | Libra Insurance vs. Azorim Investment Development | Libra Insurance vs. Hiron Trade Investments Industrial |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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