Correlation Between Itay Financial and Direct Capital
Can any of the company-specific risk be diversified away by investing in both Itay Financial and Direct Capital 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 Direct Capital 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 Direct Capital Investments, you can compare the effects of market volatilities on Itay Financial and Direct Capital 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 Direct Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itay Financial and Direct Capital.
Diversification Opportunities for Itay Financial and Direct Capital
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Itay and Direct is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Itay Financial AA and Direct Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direct Capital Inves 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 Direct Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direct Capital Inves has no effect on the direction of Itay Financial i.e., Itay Financial and Direct Capital go up and down completely randomly.
Pair Corralation between Itay Financial and Direct Capital
Assuming the 90 days trading horizon Itay Financial is expected to generate 1.31 times less return on investment than Direct Capital. In addition to that, Itay Financial is 1.09 times more volatile than Direct Capital Investments. It trades about 0.04 of its total potential returns per unit of risk. Direct Capital Investments is currently generating about 0.06 per unit of volatility. If you would invest 7,510 in Direct Capital Investments on September 1, 2024 and sell it today you would earn a total of 77,510 from holding Direct Capital Investments or generate 1032.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itay Financial AA vs. Direct Capital Investments
Performance |
| Timeline |
| Itay Financial AA |
| Direct Capital Inves |
Itay Financial and Direct Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itay Financial and Direct Capital
The main advantage of trading using opposite Itay Financial and Direct Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itay Financial position performs unexpectedly, Direct Capital 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 Direct Capital will offset losses from the drop in Direct Capital's long position.| Itay Financial vs. Harel Insurance Investments | Itay Financial vs. Teuza A Fairchild | Itay Financial vs. Blender Financial Technologies | Itay Financial vs. Gamatronic Electronic Industries |
| Direct Capital vs. Nice | Direct Capital vs. The Gold Bond | Direct Capital vs. Bank Leumi Le Israel | Direct Capital vs. ICL Israel Chemicals |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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