Correlation Between Israel Canada and Nextgen
Can any of the company-specific risk be diversified away by investing in both Israel Canada and Nextgen 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 Canada and Nextgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Canada and Nextgen, you can compare the effects of market volatilities on Israel Canada and Nextgen 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 Canada with a short position of Nextgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Canada and Nextgen.
Diversification Opportunities for Israel Canada and Nextgen
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Israel and Nextgen is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Israel Canada and Nextgen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextgen and Israel Canada 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 Canada are associated (or correlated) with Nextgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextgen has no effect on the direction of Israel Canada i.e., Israel Canada and Nextgen go up and down completely randomly.
Pair Corralation between Israel Canada and Nextgen
Assuming the 90 days trading horizon Israel Canada is expected to under-perform the Nextgen. But the stock apears to be less risky and, when comparing its historical volatility, Israel Canada is 3.3 times less risky than Nextgen. The stock trades about -0.27 of its potential returns per unit of risk. The Nextgen is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 6,700 in Nextgen on November 27, 2024 and sell it today you would lose (700.00) from holding Nextgen or give up 10.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Canada vs. Nextgen
Performance |
| Timeline |
| Israel Canada |
| Nextgen |
Israel Canada and Nextgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Canada and Nextgen
The main advantage of trading using opposite Israel Canada and Nextgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Canada position performs unexpectedly, Nextgen 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 Nextgen will offset losses from the drop in Nextgen's long position.| Israel Canada vs. Azrieli Group | Israel Canada vs. Shikun Binui | Israel Canada vs. Ashtrom Group | Israel Canada vs. Enlight Renewable Energy |
| Nextgen vs. Unic tech Limited Partnership | Nextgen vs. Priortech | Nextgen vs. Rapac Communication Infrastructure | Nextgen vs. Iargento Hi Tech |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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