Correlation Between IDI Insurance and Victory Supermarket
Can any of the company-specific risk be diversified away by investing in both IDI Insurance and Victory Supermarket 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 Victory Supermarket into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDI Insurance and Victory Supermarket Chain, you can compare the effects of market volatilities on IDI Insurance and Victory Supermarket 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 Victory Supermarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDI Insurance and Victory Supermarket.
Diversification Opportunities for IDI Insurance and Victory Supermarket
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IDI and Victory is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding IDI Insurance and Victory Supermarket Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Supermarket Chain 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 Victory Supermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Supermarket Chain has no effect on the direction of IDI Insurance i.e., IDI Insurance and Victory Supermarket go up and down completely randomly.
Pair Corralation between IDI Insurance and Victory Supermarket
Assuming the 90 days trading horizon IDI Insurance is expected to generate 2.75 times less return on investment than Victory Supermarket. But when comparing it to its historical volatility, IDI Insurance is 1.0 times less risky than Victory Supermarket. It trades about 0.11 of its potential returns per unit of risk. Victory Supermarket Chain is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 487,000 in Victory Supermarket Chain on September 4, 2024 and sell it today you would earn a total of 47,000 from holding Victory Supermarket Chain or generate 9.65% 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. Victory Supermarket Chain
Performance |
| Timeline |
| IDI Insurance |
| Victory Supermarket Chain |
IDI Insurance and Victory Supermarket Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDI Insurance and Victory Supermarket
The main advantage of trading using opposite IDI Insurance and Victory Supermarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDI Insurance position performs unexpectedly, Victory Supermarket 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 Victory Supermarket will offset losses from the drop in Victory Supermarket's long position.| IDI Insurance vs. Bank Hapoalim | IDI Insurance vs. Israel Discount Bank | IDI Insurance vs. First International Bank | IDI Insurance vs. Elbit Systems |
| Victory Supermarket vs. Shufersal | Victory Supermarket vs. Rami Levi | Victory Supermarket vs. Tiv Taam | Victory Supermarket vs. M Yochananof and |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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