Correlation Between Isras Investment and Plaza Centers
Can any of the company-specific risk be diversified away by investing in both Isras Investment and Plaza Centers 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 Plaza Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Isras Investment and Plaza Centers NV, you can compare the effects of market volatilities on Isras Investment and Plaza Centers 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 Plaza Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Isras Investment and Plaza Centers.
Diversification Opportunities for Isras Investment and Plaza Centers
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Isras and Plaza is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Isras Investment and Plaza Centers NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Centers NV 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 Plaza Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Centers NV has no effect on the direction of Isras Investment i.e., Isras Investment and Plaza Centers go up and down completely randomly.
Pair Corralation between Isras Investment and Plaza Centers
Assuming the 90 days trading horizon Isras Investment is expected to generate 0.11 times more return on investment than Plaza Centers. However, Isras Investment is 9.36 times less risky than Plaza Centers. It trades about 0.2 of its potential returns per unit of risk. Plaza Centers NV is currently generating about 0.01 per unit of risk. If you would invest 7,267,000 in Isras Investment on August 29, 2024 and sell it today you would earn a total of 1,283,000 from holding Isras Investment or generate 17.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Isras Investment vs. Plaza Centers NV
Performance |
| Timeline |
| Isras Investment |
| Plaza Centers NV |
Isras Investment and Plaza Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Isras Investment and Plaza Centers
The main advantage of trading using opposite Isras Investment and Plaza Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Isras Investment position performs unexpectedly, Plaza Centers 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 Plaza Centers will offset losses from the drop in Plaza Centers' long position.| Isras Investment vs. Fox Wizel | Isras Investment vs. Amot Investments | Isras Investment vs. Harel Insurance Investments | Isras Investment vs. Opal Balance |
| Plaza Centers vs. B Communications | Plaza Centers vs. Israel Discount Bank | Plaza Centers vs. Computer Direct | Plaza Centers vs. Scope Metals Group |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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