Correlation Between Israel Opportunity and Amot Investments
Can any of the company-specific risk be diversified away by investing in both Israel Opportunity and Amot Investments 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 Opportunity and Amot Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Opportunity and Amot Investments, you can compare the effects of market volatilities on Israel Opportunity and Amot Investments 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 Opportunity with a short position of Amot Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Opportunity and Amot Investments.
Diversification Opportunities for Israel Opportunity and Amot Investments
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Israel and Amot is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Israel Opportunity and Amot Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amot Investments and Israel Opportunity 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 Opportunity are associated (or correlated) with Amot Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amot Investments has no effect on the direction of Israel Opportunity i.e., Israel Opportunity and Amot Investments go up and down completely randomly.
Pair Corralation between Israel Opportunity and Amot Investments
Assuming the 90 days trading horizon Israel Opportunity is expected to under-perform the Amot Investments. In addition to that, Israel Opportunity is 1.63 times more volatile than Amot Investments. It trades about -0.11 of its total potential returns per unit of risk. Amot Investments is currently generating about 0.46 per unit of volatility. If you would invest 165,178 in Amot Investments on August 29, 2024 and sell it today you would earn a total of 28,322 from holding Amot Investments or generate 17.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Opportunity vs. Amot Investments
Performance |
| Timeline |
| Israel Opportunity |
| Amot Investments |
Israel Opportunity and Amot Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Opportunity and Amot Investments
The main advantage of trading using opposite Israel Opportunity and Amot Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Opportunity position performs unexpectedly, Amot Investments 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 Amot Investments will offset losses from the drop in Amot Investments' long position.| Israel Opportunity vs. Lapidoth | Israel Opportunity vs. Ilex Medical | Israel Opportunity vs. Aerodrome Group | Israel Opportunity vs. Opal Balance |
| Amot Investments vs. Israel Canada | Amot Investments vs. Azrieli Group | Amot Investments vs. Delek Group | Amot Investments vs. Israel Discount Bank |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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