Correlation Between Israel Discount and DBS Group
Can any of the company-specific risk be diversified away by investing in both Israel Discount and DBS Group 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 DBS Group 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 DBS Group Holdings, you can compare the effects of market volatilities on Israel Discount and DBS Group 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 DBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and DBS Group.
Diversification Opportunities for Israel Discount and DBS Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Israel and DBS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and DBS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS Group Holdings 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 DBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS Group Holdings has no effect on the direction of Israel Discount i.e., Israel Discount and DBS Group go up and down completely randomly.
Pair Corralation between Israel Discount and DBS Group
Assuming the 90 days horizon Israel Discount Bank is expected to generate 5.47 times more return on investment than DBS Group. However, Israel Discount is 5.47 times more volatile than DBS Group Holdings. It trades about 0.03 of its potential returns per unit of risk. DBS Group Holdings is currently generating about 0.08 per unit of risk. If you would invest 5,305 in Israel Discount Bank on August 26, 2024 and sell it today you would earn a total of 514.00 from holding Israel Discount Bank or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 80.08% |
| Values | Daily Returns |
Israel Discount Bank vs. DBS Group Holdings
Performance |
| Timeline |
| Israel Discount Bank |
| DBS Group Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Israel Discount and DBS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and DBS Group
The main advantage of trading using opposite Israel Discount and DBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, DBS Group 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 DBS Group will offset losses from the drop in DBS Group'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 |
| DBS Group vs. KBC Groep NV | DBS Group vs. United Overseas Bank | DBS Group vs. Swedbank AB | DBS Group vs. Nordea Bank Abp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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