Correlation Between Israel Corp and Shufersal
Can any of the company-specific risk be diversified away by investing in both Israel Corp and Shufersal 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 Corp and Shufersal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Corp and Shufersal, you can compare the effects of market volatilities on Israel Corp and Shufersal 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 Corp with a short position of Shufersal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Corp and Shufersal.
Diversification Opportunities for Israel Corp and Shufersal
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Israel and Shufersal is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Israel Corp and Shufersal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shufersal and Israel Corp 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 Corp are associated (or correlated) with Shufersal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shufersal has no effect on the direction of Israel Corp i.e., Israel Corp and Shufersal go up and down completely randomly.
Pair Corralation between Israel Corp and Shufersal
Assuming the 90 days trading horizon Israel Corp is expected to generate 1.29 times less return on investment than Shufersal. In addition to that, Israel Corp is 2.31 times more volatile than Shufersal. It trades about 0.12 of its total potential returns per unit of risk. Shufersal is currently generating about 0.36 per unit of volatility. If you would invest 326,800 in Shufersal on August 30, 2024 and sell it today you would earn a total of 30,300 from holding Shufersal or generate 9.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Corp vs. Shufersal
Performance |
| Timeline |
| Israel Corp |
| Shufersal |
Israel Corp and Shufersal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Corp and Shufersal
The main advantage of trading using opposite Israel Corp and Shufersal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Corp position performs unexpectedly, Shufersal 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 Shufersal will offset losses from the drop in Shufersal's long position.| Israel Corp vs. Elbit Systems | Israel Corp vs. Bezeq Israeli Telecommunication | Israel Corp vs. Teva Pharmaceutical Industries | Israel Corp vs. Bank Leumi Le Israel |
| Shufersal vs. Rami Levi | Shufersal vs. Bezeq Israeli Telecommunication | Shufersal vs. Bank Hapoalim | Shufersal 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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