Correlation Between Israel Opportunity and Nissan
Can any of the company-specific risk be diversified away by investing in both Israel Opportunity and Nissan 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 Nissan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Opportunity and Nissan, you can compare the effects of market volatilities on Israel Opportunity and Nissan 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 Nissan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Opportunity and Nissan.
Diversification Opportunities for Israel Opportunity and Nissan
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Israel and Nissan is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Israel Opportunity and Nissan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nissan 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 Nissan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nissan has no effect on the direction of Israel Opportunity i.e., Israel Opportunity and Nissan go up and down completely randomly.
Pair Corralation between Israel Opportunity and Nissan
Assuming the 90 days trading horizon Israel Opportunity is expected to generate 0.65 times more return on investment than Nissan. However, Israel Opportunity is 1.54 times less risky than Nissan. It trades about -0.01 of its potential returns per unit of risk. Nissan is currently generating about -0.09 per unit of risk. If you would invest 7,400 in Israel Opportunity on September 1, 2024 and sell it today you would lose (80.00) from holding Israel Opportunity or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Opportunity vs. Nissan
Performance |
| Timeline |
| Israel Opportunity |
| Nissan |
Israel Opportunity and Nissan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Opportunity and Nissan
The main advantage of trading using opposite Israel Opportunity and Nissan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Opportunity position performs unexpectedly, Nissan 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 Nissan will offset losses from the drop in Nissan's long position.| Israel Opportunity vs. More Mutual Funds | Israel Opportunity vs. Ram On Investments and | Israel Opportunity vs. B Communications | Israel Opportunity vs. Discount Investment Corp |
| Nissan vs. Bezeq Israeli Telecommunication | Nissan vs. Brainsway | Nissan vs. Mivne Real Estate | Nissan vs. Photomyne |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |