Correlation Between Israel Discount and Southern BancShares
Can any of the company-specific risk be diversified away by investing in both Israel Discount and Southern BancShares 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 Southern BancShares 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 Southern BancShares PFD, you can compare the effects of market volatilities on Israel Discount and Southern BancShares 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 Southern BancShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Southern BancShares.
Diversification Opportunities for Israel Discount and Southern BancShares
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Israel and Southern is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and Southern BancShares PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern BancShares PFD 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 Southern BancShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern BancShares PFD has no effect on the direction of Israel Discount i.e., Israel Discount and Southern BancShares go up and down completely randomly.
Pair Corralation between Israel Discount and Southern BancShares
Assuming the 90 days horizon Israel Discount Bank is expected to generate 2.75 times more return on investment than Southern BancShares. However, Israel Discount is 2.75 times more volatile than Southern BancShares PFD. It trades about 0.04 of its potential returns per unit of risk. Southern BancShares PFD is currently generating about -0.02 per unit of risk. If you would invest 4,766 in Israel Discount Bank on November 2, 2024 and sell it today you would earn a total of 1,434 from holding Israel Discount Bank or generate 30.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 73.67% |
| Values | Daily Returns |
Israel Discount Bank vs. Southern BancShares PFD
Performance |
| Timeline |
| Israel Discount Bank |
| Southern BancShares PFD |
Israel Discount and Southern BancShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and Southern BancShares
The main advantage of trading using opposite Israel Discount and Southern BancShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, Southern BancShares 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 Southern BancShares will offset losses from the drop in Southern BancShares' long position.| Israel Discount vs. Baraboo Bancorporation | Israel Discount vs. Schweizerische Nationalbank | Israel Discount vs. Danske Bank AS | Israel Discount vs. Absa Group Limited |
| Southern BancShares vs. Grocery Outlet Holding | Southern BancShares vs. PennantPark Floating Rate | Southern BancShares vs. FS KKR Capital | Southern BancShares vs. Gladstone Investment |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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