Correlation Between Jerusalem and Evogene
Can any of the company-specific risk be diversified away by investing in both Jerusalem and Evogene 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 Jerusalem and Evogene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jerusalem and Evogene, you can compare the effects of market volatilities on Jerusalem and Evogene 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 Jerusalem with a short position of Evogene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jerusalem and Evogene.
Diversification Opportunities for Jerusalem and Evogene
Excellent diversification
The 3 months correlation between Jerusalem and Evogene is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jerusalem and Evogene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evogene and Jerusalem 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 Jerusalem are associated (or correlated) with Evogene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evogene has no effect on the direction of Jerusalem i.e., Jerusalem and Evogene go up and down completely randomly.
Pair Corralation between Jerusalem and Evogene
Assuming the 90 days trading horizon Jerusalem is expected to generate 0.36 times more return on investment than Evogene. However, Jerusalem is 2.75 times less risky than Evogene. It trades about 0.08 of its potential returns per unit of risk. Evogene is currently generating about -0.26 per unit of risk. If you would invest 128,723 in Jerusalem on August 25, 2024 and sell it today you would earn a total of 21,277 from holding Jerusalem or generate 16.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jerusalem vs. Evogene
Performance |
| Timeline |
| Jerusalem |
| Evogene |
Jerusalem and Evogene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jerusalem and Evogene
The main advantage of trading using opposite Jerusalem and Evogene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jerusalem position performs unexpectedly, Evogene 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 Evogene will offset losses from the drop in Evogene's long position.| Jerusalem vs. Mizrahi Tefahot | Jerusalem vs. First International Bank | Jerusalem vs. Israel Discount Bank | Jerusalem vs. Bank Leumi Le Israel |
| Evogene vs. Netz Hotels | Evogene vs. Migdal Insurance | Evogene vs. Harel Insurance Investments | Evogene vs. Menora Miv Hld |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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