Correlation Between Israel Canada and Summit
Can any of the company-specific risk be diversified away by investing in both Israel Canada and Summit 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 Summit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Canada and Summit, you can compare the effects of market volatilities on Israel Canada and Summit 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 Summit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Canada and Summit.
Diversification Opportunities for Israel Canada and Summit
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Israel and Summit is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Israel Canada and Summit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit 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 Summit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit has no effect on the direction of Israel Canada i.e., Israel Canada and Summit go up and down completely randomly.
Pair Corralation between Israel Canada and Summit
Assuming the 90 days trading horizon Israel Canada is expected to generate 0.61 times more return on investment than Summit. However, Israel Canada is 1.63 times less risky than Summit. It trades about 0.12 of its potential returns per unit of risk. Summit is currently generating about 0.03 per unit of risk. If you would invest 140,200 in Israel Canada on September 1, 2024 and sell it today you would earn a total of 4,800 from holding Israel Canada or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Canada vs. Summit
Performance |
| Timeline |
| Israel Canada |
| Summit |
Israel Canada and Summit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Canada and Summit
The main advantage of trading using opposite Israel Canada and Summit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Canada position performs unexpectedly, Summit 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 Summit will offset losses from the drop in Summit's long position.| Israel Canada vs. Azrieli Group | Israel Canada vs. Shikun Binui | Israel Canada vs. Ashtrom Group | Israel Canada vs. Enlight Renewable Energy |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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