Correlation Between Isras Investment and Israel Shipyards
Can any of the company-specific risk be diversified away by investing in both Isras Investment and Israel Shipyards 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 Isras Investment and Israel Shipyards into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Isras Investment and Israel Shipyards, you can compare the effects of market volatilities on Isras Investment and Israel Shipyards 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 Isras Investment with a short position of Israel Shipyards. Check out your portfolio center. Please also check ongoing floating volatility patterns of Isras Investment and Israel Shipyards.
Diversification Opportunities for Isras Investment and Israel Shipyards
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Isras and Israel is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Isras Investment and Israel Shipyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Shipyards and Isras Investment 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 Isras Investment are associated (or correlated) with Israel Shipyards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Shipyards has no effect on the direction of Isras Investment i.e., Isras Investment and Israel Shipyards go up and down completely randomly.
Pair Corralation between Isras Investment and Israel Shipyards
Assuming the 90 days trading horizon Isras Investment is expected to generate 1.05 times more return on investment than Israel Shipyards. However, Isras Investment is 1.05 times more volatile than Israel Shipyards. It trades about 0.02 of its potential returns per unit of risk. Israel Shipyards is currently generating about -0.03 per unit of risk. If you would invest 8,952,000 in Isras Investment on November 22, 2024 and sell it today you would earn a total of 22,000 from holding Isras Investment or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Isras Investment vs. Israel Shipyards
Performance |
| Timeline |
| Isras Investment |
| Israel Shipyards |
Isras Investment and Israel Shipyards Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Isras Investment and Israel Shipyards
The main advantage of trading using opposite Isras Investment and Israel Shipyards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Isras Investment position performs unexpectedly, Israel Shipyards 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 Shipyards will offset losses from the drop in Israel Shipyards' long position.| Isras Investment vs. Alony Hetz Properties | Isras Investment vs. Fox Wizel | Isras Investment vs. Amot Investments | Isras Investment vs. Harel Insurance Investments |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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