Correlation Between Israel Land and Holmes Place
Can any of the company-specific risk be diversified away by investing in both Israel Land and Holmes Place 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 Land and Holmes Place into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Land Development and Holmes Place International, you can compare the effects of market volatilities on Israel Land and Holmes Place 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 Land with a short position of Holmes Place. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Land and Holmes Place.
Diversification Opportunities for Israel Land and Holmes Place
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Israel and Holmes is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Israel Land Development and Holmes Place International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holmes Place Interna and Israel Land 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 Land Development are associated (or correlated) with Holmes Place. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holmes Place Interna has no effect on the direction of Israel Land i.e., Israel Land and Holmes Place go up and down completely randomly.
Pair Corralation between Israel Land and Holmes Place
Assuming the 90 days trading horizon Israel Land is expected to generate 1.43 times less return on investment than Holmes Place. In addition to that, Israel Land is 1.63 times more volatile than Holmes Place International. It trades about 0.04 of its total potential returns per unit of risk. Holmes Place International is currently generating about 0.09 per unit of volatility. If you would invest 34,262 in Holmes Place International on November 27, 2024 and sell it today you would earn a total of 31,238 from holding Holmes Place International or generate 91.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Land Development vs. Holmes Place International
Performance |
| Timeline |
| Israel Land Development |
| Holmes Place Interna |
Israel Land and Holmes Place Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Land and Holmes Place
The main advantage of trading using opposite Israel Land and Holmes Place positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Land position performs unexpectedly, Holmes Place 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 Holmes Place will offset losses from the drop in Holmes Place's long position.| Israel Land vs. Israel Land Development | Israel Land vs. Lapidoth | Israel Land vs. Ilex Medical | Israel Land vs. Aerodrome Group |
| Holmes Place vs. Fattal 1998 Holdings | Holmes Place vs. Delek Group | Holmes Place vs. Bank Leumi Le Israel | Holmes Place vs. Matrix |
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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