Correlation Between Itay Financial and Libra Insurance
Can any of the company-specific risk be diversified away by investing in both Itay Financial and Libra Insurance 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 Libra Insurance 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 Libra Insurance, you can compare the effects of market volatilities on Itay Financial and Libra Insurance 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 Libra Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itay Financial and Libra Insurance.
Diversification Opportunities for Itay Financial and Libra Insurance
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Itay and Libra is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Itay Financial AA and Libra Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libra Insurance 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 Libra Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libra Insurance has no effect on the direction of Itay Financial i.e., Itay Financial and Libra Insurance go up and down completely randomly.
Pair Corralation between Itay Financial and Libra Insurance
Assuming the 90 days trading horizon Itay Financial AA is expected to generate 1.13 times more return on investment than Libra Insurance. However, Itay Financial is 1.13 times more volatile than Libra Insurance. It trades about 0.48 of its potential returns per unit of risk. Libra Insurance is currently generating about 0.5 per unit of risk. If you would invest 27,000 in Itay Financial AA on September 13, 2024 and sell it today you would earn a total of 11,900 from holding Itay Financial AA or generate 44.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itay Financial AA vs. Libra Insurance
Performance |
| Timeline |
| Itay Financial AA |
| Libra Insurance |
Itay Financial and Libra Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itay Financial and Libra Insurance
The main advantage of trading using opposite Itay Financial and Libra Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itay Financial position performs unexpectedly, Libra Insurance 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 Libra Insurance will offset losses from the drop in Libra Insurance's long position.| Itay Financial vs. Direct Capital Investments | Itay Financial vs. Netz Hotels | Itay Financial vs. Opal Balance | Itay Financial vs. B Communications |
| Libra Insurance vs. Payment Financial Technologies | Libra Insurance vs. Itay Financial AA | Libra Insurance vs. Blender Financial Technologies | Libra Insurance vs. Bank Leumi Le Israel |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |