Correlation Between Itay Financial and Bram Indus
Can any of the company-specific risk be diversified away by investing in both Itay Financial and Bram Indus 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 Itay Financial and Bram Indus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itay Financial AA and Bram Indus, you can compare the effects of market volatilities on Itay Financial and Bram Indus 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 Itay Financial with a short position of Bram Indus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itay Financial and Bram Indus.
Diversification Opportunities for Itay Financial and Bram Indus
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Itay and Bram is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Itay Financial AA and Bram Indus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bram Indus and Itay Financial 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 Itay Financial AA are associated (or correlated) with Bram Indus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bram Indus has no effect on the direction of Itay Financial i.e., Itay Financial and Bram Indus go up and down completely randomly.
Pair Corralation between Itay Financial and Bram Indus
Assuming the 90 days trading horizon Itay Financial AA is expected to generate 9.1 times more return on investment than Bram Indus. However, Itay Financial is 9.1 times more volatile than Bram Indus. It trades about 0.1 of its potential returns per unit of risk. Bram Indus is currently generating about -0.13 per unit of risk. If you would invest 39,440 in Itay Financial AA on October 25, 2024 and sell it today you would earn a total of 3,360 from holding Itay Financial AA or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itay Financial AA vs. Bram Indus
Performance |
| Timeline |
| Itay Financial AA |
| Bram Indus |
Itay Financial and Bram Indus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itay Financial and Bram Indus
The main advantage of trading using opposite Itay Financial and Bram Indus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itay Financial position performs unexpectedly, Bram Indus 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 Bram Indus will offset losses from the drop in Bram Indus' long position.| Itay Financial vs. Direct Capital Investments | Itay Financial vs. Netz Hotels | Itay Financial vs. Mivne Real Estate | Itay Financial vs. Israel Land Development |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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