Correlation Between IDI Insurance and Automatic Bank
Can any of the company-specific risk be diversified away by investing in both IDI Insurance and Automatic Bank 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 Automatic Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDI Insurance and Automatic Bank Services, you can compare the effects of market volatilities on IDI Insurance and Automatic Bank 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 Automatic Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDI Insurance and Automatic Bank.
Diversification Opportunities for IDI Insurance and Automatic Bank
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IDI and Automatic is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding IDI Insurance and Automatic Bank Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Bank Services 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 Automatic Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Bank Services has no effect on the direction of IDI Insurance i.e., IDI Insurance and Automatic Bank go up and down completely randomly.
Pair Corralation between IDI Insurance and Automatic Bank
Assuming the 90 days trading horizon IDI Insurance is expected to generate 0.96 times more return on investment than Automatic Bank. However, IDI Insurance is 1.04 times less risky than Automatic Bank. It trades about 0.1 of its potential returns per unit of risk. Automatic Bank Services is currently generating about 0.09 per unit of risk. If you would invest 645,619 in IDI Insurance on September 20, 2024 and sell it today you would earn a total of 703,381 from holding IDI Insurance or generate 108.95% 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. Automatic Bank Services
Performance |
| Timeline |
| IDI Insurance |
| Automatic Bank Services |
IDI Insurance and Automatic Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDI Insurance and Automatic Bank
The main advantage of trading using opposite IDI Insurance and Automatic Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDI Insurance position performs unexpectedly, Automatic Bank 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 Automatic Bank will offset losses from the drop in Automatic Bank's long position.| IDI Insurance vs. Harel Insurance Investments | IDI Insurance vs. Migdal Insurance | IDI Insurance vs. Menora Miv Hld | IDI Insurance vs. The Phoenix Holdings |
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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