Correlation Between Israel Land and Strauss
Can any of the company-specific risk be diversified away by investing in both Israel Land and Strauss 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 Strauss 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 Strauss Group, you can compare the effects of market volatilities on Israel Land and Strauss 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 Strauss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Land and Strauss.
Diversification Opportunities for Israel Land and Strauss
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Israel and Strauss is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Israel Land Development and Strauss Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strauss Group 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 Strauss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strauss Group has no effect on the direction of Israel Land i.e., Israel Land and Strauss go up and down completely randomly.
Pair Corralation between Israel Land and Strauss
Assuming the 90 days trading horizon Israel Land Development is expected to under-perform the Strauss. In addition to that, Israel Land is 1.11 times more volatile than Strauss Group. It trades about -0.37 of its total potential returns per unit of risk. Strauss Group is currently generating about 0.54 per unit of volatility. If you would invest 707,700 in Strauss Group on November 27, 2024 and sell it today you would earn a total of 80,300 from holding Strauss Group or generate 11.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Land Development vs. Strauss Group
Performance |
| Timeline |
| Israel Land Development |
| Strauss Group |
Israel Land and Strauss Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Land and Strauss
The main advantage of trading using opposite Israel Land and Strauss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Land position performs unexpectedly, Strauss 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 Strauss will offset losses from the drop in Strauss' long position.| Israel Land vs. Israel Land Development | Israel Land vs. Lapidoth | Israel Land vs. Ilex Medical | Israel Land vs. Aerodrome Group |
| Strauss vs. Shufersal | Strauss vs. Israel Discount Bank | Strauss vs. Bank Leumi Le Israel | Strauss vs. Azrieli Group |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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