Correlation Between Libra Insurance and Israel China
Can any of the company-specific risk be diversified away by investing in both Libra Insurance and Israel China 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 Libra Insurance and Israel China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Libra Insurance and Israel China Biotechnology, you can compare the effects of market volatilities on Libra Insurance and Israel China 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 Libra Insurance with a short position of Israel China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libra Insurance and Israel China.
Diversification Opportunities for Libra Insurance and Israel China
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Libra and Israel is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Libra Insurance and Israel China Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel China Biotech and Libra Insurance 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 Libra Insurance are associated (or correlated) with Israel China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel China Biotech has no effect on the direction of Libra Insurance i.e., Libra Insurance and Israel China go up and down completely randomly.
Pair Corralation between Libra Insurance and Israel China
Assuming the 90 days trading horizon Libra Insurance is expected to generate 0.83 times more return on investment than Israel China. However, Libra Insurance is 1.21 times less risky than Israel China. It trades about 0.11 of its potential returns per unit of risk. Israel China Biotechnology is currently generating about -0.09 per unit of risk. If you would invest 100,700 in Libra Insurance on November 29, 2024 and sell it today you would earn a total of 5,600 from holding Libra Insurance or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Libra Insurance vs. Israel China Biotechnology
Performance |
| Timeline |
| Libra Insurance |
| Israel China Biotech |
Libra Insurance and Israel China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Libra Insurance and Israel China
The main advantage of trading using opposite Libra Insurance and Israel China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Libra Insurance position performs unexpectedly, Israel China 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 Israel China will offset losses from the drop in Israel China's long position.| Libra Insurance vs. Willy Food | Libra Insurance vs. Magic Software Enterprises | Libra Insurance vs. Azorim Investment Development | Libra Insurance vs. Hiron Trade Investments Industrial |
| Israel China vs. Clal Insurance Enterprises | Israel China vs. G Willi Food International | Israel China vs. Millennium Food Tech LP | Israel China vs. Arad Investment Industrial |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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