Correlation Between Israel Shipyards and Israel China
Can any of the company-specific risk be diversified away by investing in both Israel Shipyards and Israel China 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 Shipyards and Israel China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Shipyards and Israel China Biotechnology, you can compare the effects of market volatilities on Israel Shipyards and Israel China 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 Shipyards with a short position of Israel China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Shipyards and Israel China.
Diversification Opportunities for Israel Shipyards and Israel China
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Israel and Israel is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Israel Shipyards and Israel China Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel China Biotech and Israel Shipyards 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 Shipyards are associated (or correlated) with Israel China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel China Biotech has no effect on the direction of Israel Shipyards i.e., Israel Shipyards and Israel China go up and down completely randomly.
Pair Corralation between Israel Shipyards and Israel China
Assuming the 90 days trading horizon Israel Shipyards is expected to generate 65.44 times less return on investment than Israel China. But when comparing it to its historical volatility, Israel Shipyards is 20.73 times less risky than Israel China. It trades about 0.02 of its potential returns per unit of risk. Israel China Biotechnology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 12,300 in Israel China Biotechnology on September 1, 2024 and sell it today you would earn a total of 41,990 from holding Israel China Biotechnology or generate 341.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Shipyards vs. Israel China Biotechnology
Performance |
| Timeline |
| Israel Shipyards |
| Israel China Biotech |
Israel Shipyards and Israel China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Shipyards and Israel China
The main advantage of trading using opposite Israel Shipyards and Israel China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Shipyards position performs unexpectedly, Israel China 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 Israel China will offset losses from the drop in Israel China's long position.| Israel Shipyards vs. Ilex Medical | Israel Shipyards vs. Skyline Investments | Israel Shipyards vs. Elbit Medical Technologies | Israel Shipyards vs. Electreon Wireless |
| Israel China vs. YD More Investments | Israel China vs. Netz Hotels | Israel China vs. YH Dimri Construction | Israel China vs. Aura Investments |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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