Correlation Between Ilex Medical and Lachish
Can any of the company-specific risk be diversified away by investing in both Ilex Medical and Lachish 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 Ilex Medical and Lachish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ilex Medical and Lachish, you can compare the effects of market volatilities on Ilex Medical and Lachish 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 Ilex Medical with a short position of Lachish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ilex Medical and Lachish.
Diversification Opportunities for Ilex Medical and Lachish
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ilex and Lachish is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ilex Medical and Lachish in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lachish and Ilex Medical 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 Ilex Medical are associated (or correlated) with Lachish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lachish has no effect on the direction of Ilex Medical i.e., Ilex Medical and Lachish go up and down completely randomly.
Pair Corralation between Ilex Medical and Lachish
Assuming the 90 days trading horizon Ilex Medical is expected to generate 1.81 times more return on investment than Lachish. However, Ilex Medical is 1.81 times more volatile than Lachish. It trades about 0.51 of its potential returns per unit of risk. Lachish is currently generating about 0.27 per unit of risk. If you would invest 657,900 in Ilex Medical on September 13, 2024 and sell it today you would earn a total of 166,000 from holding Ilex Medical or generate 25.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ilex Medical vs. Lachish
Performance |
| Timeline |
| Ilex Medical |
| Lachish |
Ilex Medical and Lachish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ilex Medical and Lachish
The main advantage of trading using opposite Ilex Medical and Lachish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ilex Medical position performs unexpectedly, Lachish 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 Lachish will offset losses from the drop in Lachish's long position.| Ilex Medical vs. Kamada | Ilex Medical vs. Bezeq Israeli Telecommunication | Ilex Medical vs. B Communications | Ilex Medical vs. Photomyne |
| Lachish vs. Migdal Insurance | Lachish vs. Multi Retail Group | Lachish vs. Arad Investment Industrial | Lachish vs. Automatic Bank Services |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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