Correlation Between Israel China and Tel Aviv
Can any of the company-specific risk be diversified away by investing in both Israel China and Tel Aviv 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 Tel Aviv 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 Tel Aviv 35, you can compare the effects of market volatilities on Israel China and Tel Aviv 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 Tel Aviv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and Tel Aviv.
Diversification Opportunities for Israel China and Tel Aviv
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Israel and Tel is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and Tel Aviv 35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tel Aviv 35 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 Tel Aviv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tel Aviv 35 has no effect on the direction of Israel China i.e., Israel China and Tel Aviv go up and down completely randomly.
Pair Corralation between Israel China and Tel Aviv
Assuming the 90 days trading horizon Israel China Biotechnology is expected to generate 41.76 times more return on investment than Tel Aviv. However, Israel China is 41.76 times more volatile than Tel Aviv 35. It trades about 0.05 of its potential returns per unit of risk. Tel Aviv 35 is currently generating about 0.09 per unit of risk. If you would invest 10,050 in Israel China Biotechnology on November 28, 2024 and sell it today you would earn a total of 37,750 from holding Israel China Biotechnology or generate 375.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel China Biotechnology vs. Tel Aviv 35
Performance |
| Timeline |
Israel China and Tel Aviv Volatility Contrast
Predicted Return Density |
| Returns |
Israel China Biotechnology
Pair trading matchups for Israel China
Tel Aviv 35
Pair trading matchups for Tel Aviv
Pair Trading with Israel China and Tel Aviv
The main advantage of trading using opposite Israel China and Tel Aviv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel China position performs unexpectedly, Tel Aviv 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 Tel Aviv will offset losses from the drop in Tel Aviv's long position.| Israel China vs. Bank Leumi Le Israel | Israel China vs. Altshuler Shaham Financial | Israel China vs. Multi Retail Group | Israel China vs. Hiron Trade Investments Industrial |
| Tel Aviv vs. Menif Financial Services | Tel Aviv vs. WhiteSmoke Software | Tel Aviv vs. Harel Insurance Investments | Tel Aviv vs. First International Bank |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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