Correlation Between IDI Insurance and Scope Metals
Can any of the company-specific risk be diversified away by investing in both IDI Insurance and Scope Metals 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 IDI Insurance and Scope Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDI Insurance and Scope Metals Group, you can compare the effects of market volatilities on IDI Insurance and Scope Metals 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 IDI Insurance with a short position of Scope Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDI Insurance and Scope Metals.
Diversification Opportunities for IDI Insurance and Scope Metals
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IDI and Scope is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding IDI Insurance and Scope Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scope Metals Group and IDI Insurance 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 IDI Insurance are associated (or correlated) with Scope Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scope Metals Group has no effect on the direction of IDI Insurance i.e., IDI Insurance and Scope Metals go up and down completely randomly.
Pair Corralation between IDI Insurance and Scope Metals
Assuming the 90 days trading horizon IDI Insurance is expected to generate 1.53 times more return on investment than Scope Metals. However, IDI Insurance is 1.53 times more volatile than Scope Metals Group. It trades about 0.39 of its potential returns per unit of risk. Scope Metals Group is currently generating about 0.15 per unit of risk. If you would invest 1,306,000 in IDI Insurance on November 3, 2024 and sell it today you would earn a total of 184,000 from holding IDI Insurance or generate 14.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IDI Insurance vs. Scope Metals Group
Performance |
| Timeline |
| IDI Insurance |
| Scope Metals Group |
IDI Insurance and Scope Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDI Insurance and Scope Metals
The main advantage of trading using opposite IDI Insurance and Scope Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDI Insurance position performs unexpectedly, Scope Metals 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 Scope Metals will offset losses from the drop in Scope Metals' long position.| IDI Insurance vs. Migdal Insurance | IDI Insurance vs. Clal Insurance Enterprises | IDI Insurance vs. Bank Hapoalim | IDI Insurance vs. Bank Leumi Le Israel |
| Scope Metals vs. Delek Automotive Systems | Scope Metals vs. Kerur Holdings | Scope Metals vs. Neto ME Holdings | Scope Metals vs. Bank Leumi Le Israel |
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 Stocks Directory module to find actively traded stocks across global markets.
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