Correlation Between Israel Discount and Bank of Utica
Can any of the company-specific risk be diversified away by investing in both Israel Discount and Bank of Utica 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 Bank of Utica 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 Bank of Utica, you can compare the effects of market volatilities on Israel Discount and Bank of Utica 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 Bank of Utica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Bank of Utica.
Diversification Opportunities for Israel Discount and Bank of Utica
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Israel and Bank is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and Bank of Utica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Utica 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 Bank of Utica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Utica has no effect on the direction of Israel Discount i.e., Israel Discount and Bank of Utica go up and down completely randomly.
Pair Corralation between Israel Discount and Bank of Utica
Assuming the 90 days horizon Israel Discount Bank is expected to generate 1.77 times more return on investment than Bank of Utica. However, Israel Discount is 1.77 times more volatile than Bank of Utica. It trades about 0.02 of its potential returns per unit of risk. Bank of Utica is currently generating about 0.04 per unit of risk. If you would invest 5,649 in Israel Discount Bank on September 2, 2024 and sell it today you would earn a total of 170.00 from holding Israel Discount Bank or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.07% |
| Values | Daily Returns |
Israel Discount Bank vs. Bank of Utica
Performance |
| Timeline |
| Israel Discount Bank |
| Bank of Utica |
Israel Discount and Bank of Utica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and Bank of Utica
The main advantage of trading using opposite Israel Discount and Bank of Utica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, Bank of Utica 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 Bank of Utica will offset losses from the drop in Bank of Utica's long position.| Israel Discount vs. Baraboo Bancorporation | Israel Discount vs. Schweizerische Nationalbank | Israel Discount vs. Danske Bank AS | Israel Discount vs. Absa Group Limited |
| Bank of Utica vs. CCSB Financial Corp | Bank of Utica vs. First Community Financial | Bank of Utica vs. BEO Bancorp | Bank of Utica vs. First Community |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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