Correlation Between Israel Land and Libra Insurance
Can any of the company-specific risk be diversified away by investing in both Israel Land and Libra Insurance 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 Libra Insurance 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 Libra Insurance, you can compare the effects of market volatilities on Israel Land and Libra Insurance 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 Libra Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Land and Libra Insurance.
Diversification Opportunities for Israel Land and Libra Insurance
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Israel and Libra is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Israel Land Development and Libra Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libra Insurance 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 Libra Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libra Insurance has no effect on the direction of Israel Land i.e., Israel Land and Libra Insurance go up and down completely randomly.
Pair Corralation between Israel Land and Libra Insurance
Assuming the 90 days trading horizon Israel Land is expected to generate 1.52 times less return on investment than Libra Insurance. But when comparing it to its historical volatility, Israel Land Development is 1.35 times less risky than Libra Insurance. It trades about 0.35 of its potential returns per unit of risk. Libra Insurance is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 73,026 in Libra Insurance on August 31, 2024 and sell it today you would earn a total of 16,674 from holding Libra Insurance or generate 22.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Israel Land Development vs. Libra Insurance
Performance |
| Timeline |
| Israel Land Development |
| Libra Insurance |
Israel Land and Libra Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Land and Libra Insurance
The main advantage of trading using opposite Israel Land and Libra Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Land position performs unexpectedly, Libra Insurance 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 Libra Insurance will offset losses from the drop in Libra Insurance's long position.| Israel Land vs. Israel Land Development | Israel Land vs. Lapidoth | Israel Land vs. Ilex Medical | Israel Land vs. Aerodrome Group |
| Libra Insurance vs. Brainsway | Libra Insurance vs. Mivne Real Estate | Libra Insurance vs. Photomyne | Libra Insurance vs. Israel Land Development |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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