Correlation Between Isras Investment and Meitav Trade
Can any of the company-specific risk be diversified away by investing in both Isras Investment and Meitav Trade 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 Meitav Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Isras Investment and Meitav Trade Inv, you can compare the effects of market volatilities on Isras Investment and Meitav Trade 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 Meitav Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Isras Investment and Meitav Trade.
Diversification Opportunities for Isras Investment and Meitav Trade
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Isras and Meitav is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Isras Investment and Meitav Trade Inv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meitav Trade Inv 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 Meitav Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meitav Trade Inv has no effect on the direction of Isras Investment i.e., Isras Investment and Meitav Trade go up and down completely randomly.
Pair Corralation between Isras Investment and Meitav Trade
Assuming the 90 days trading horizon Isras Investment is expected to under-perform the Meitav Trade. But the stock apears to be less risky and, when comparing its historical volatility, Isras Investment is 1.01 times less risky than Meitav Trade. The stock trades about -0.1 of its potential returns per unit of risk. The Meitav Trade Inv is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 128,700 in Meitav Trade Inv on November 3, 2024 and sell it today you would earn a total of 7,800 from holding Meitav Trade Inv or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Isras Investment vs. Meitav Trade Inv
Performance |
| Timeline |
| Isras Investment |
| Meitav Trade Inv |
Isras Investment and Meitav Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Isras Investment and Meitav Trade
The main advantage of trading using opposite Isras Investment and Meitav Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Isras Investment position performs unexpectedly, Meitav Trade 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 Meitav Trade will offset losses from the drop in Meitav Trade's long position.| Isras Investment vs. Alony Hetz Properties | Isras Investment vs. Fox Wizel | Isras Investment vs. Amot Investments | Isras Investment vs. Harel Insurance Investments |
| Meitav Trade vs. Inrom Construction Industries | Meitav Trade vs. Amot Investments | Meitav Trade vs. Suny Cellular Communication | Meitav Trade vs. Feat Fund 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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