Correlation Between Israel Discount and Banco Del

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Can any of the company-specific risk be diversified away by investing in both Israel Discount and Banco Del 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 Discount and Banco Del into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Discount Bank and Banco del Bajo, you can compare the effects of market volatilities on Israel Discount and Banco Del 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 Discount with a short position of Banco Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Banco Del.

Diversification Opportunities for Israel Discount and Banco Del

IsraelBancoDiversified AwayIsraelBancoDiversified Away100%
0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between Israel and Banco is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and Banco del Bajo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco del Bajo and Israel Discount 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 Discount Bank are associated (or correlated) with Banco Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco del Bajo has no effect on the direction of Israel Discount i.e., Israel Discount and Banco Del go up and down completely randomly.

Pair Corralation between Israel Discount and Banco Del

If you would invest  6,200  in Israel Discount Bank on November 27, 2024 and sell it today you would earn a total of  0.00  from holding Israel Discount Bank or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy10.0%
ValuesDaily Returns

Israel Discount Bank  vs.  Banco del Bajo

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -40-30-20-1001020
JavaScript chart by amCharts 3.21.15ISDAY BBAJF
       Timeline  
Israel Discount Bank 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Israel Discount Bank are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Israel Discount may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5860626466687072
Banco del Bajo 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Over the last 90 days Banco del Bajo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile forward-looking indicators, Banco Del reported solid returns over the last few months and may actually be approaching a breakup point.

Israel Discount and Banco Del Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.99-5.23-3.48-1.72-0.02921.773.575.387.18 0.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.15ISDAY BBAJF
       Returns  

Pair Trading with Israel Discount and Banco Del

The main advantage of trading using opposite Israel Discount and Banco Del positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, Banco Del 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 Banco Del will offset losses from the drop in Banco Del's long position.
The idea behind Israel Discount Bank and Banco del Bajo pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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