Correlation Between Israel China and Plaza Centers
Can any of the company-specific risk be diversified away by investing in both Israel China and Plaza Centers 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 Plaza Centers 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 Plaza Centers NV, you can compare the effects of market volatilities on Israel China and Plaza Centers 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 Plaza Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and Plaza Centers.
Diversification Opportunities for Israel China and Plaza Centers
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Israel and Plaza is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and Plaza Centers NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Centers NV 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 Plaza Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Centers NV has no effect on the direction of Israel China i.e., Israel China and Plaza Centers go up and down completely randomly.
Pair Corralation between Israel China and Plaza Centers
Assuming the 90 days trading horizon Israel China Biotechnology is expected to generate 5.29 times more return on investment than Plaza Centers. However, Israel China is 5.29 times more volatile than Plaza Centers NV. It trades about 0.06 of its potential returns per unit of risk. Plaza Centers NV is currently generating about 0.06 per unit of risk. If you would invest 11,200 in Israel China Biotechnology on September 12, 2024 and sell it today you would earn a total of 45,160 from holding Israel China Biotechnology or generate 403.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel China Biotechnology vs. Plaza Centers NV
Performance |
| Timeline |
| Israel China Biotech |
| Plaza Centers NV |
Israel China and Plaza Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel China and Plaza Centers
The main advantage of trading using opposite Israel China and Plaza Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel China position performs unexpectedly, Plaza Centers 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 Plaza Centers will offset losses from the drop in Plaza Centers' long position.| Israel China vs. B Communications | Israel China vs. Photomyne | Israel China vs. M Yochananof and | Israel China vs. Clal Biotechnology Industries |
| Plaza Centers vs. Global Knafaim Leasing | Plaza Centers vs. Tower Semiconductor | Plaza Centers vs. Iargento Hi Tech | Plaza Centers vs. Magic Software Enterprises |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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