Correlation Between Levinstein Prop and IDI Insurance
Can any of the company-specific risk be diversified away by investing in both Levinstein Prop and IDI 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 Levinstein Prop and IDI Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Levinstein Prop and IDI Insurance, you can compare the effects of market volatilities on Levinstein Prop and IDI 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 Levinstein Prop with a short position of IDI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levinstein Prop and IDI Insurance.
Diversification Opportunities for Levinstein Prop and IDI Insurance
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Levinstein and IDI is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Levinstein Prop and IDI Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDI Insurance and Levinstein Prop 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 Levinstein Prop are associated (or correlated) with IDI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDI Insurance has no effect on the direction of Levinstein Prop i.e., Levinstein Prop and IDI Insurance go up and down completely randomly.
Pair Corralation between Levinstein Prop and IDI Insurance
Assuming the 90 days trading horizon Levinstein Prop is expected to generate 2.85 times less return on investment than IDI Insurance. In addition to that, Levinstein Prop is 1.28 times more volatile than IDI Insurance. It trades about 0.03 of its total potential returns per unit of risk. IDI Insurance is currently generating about 0.12 per unit of volatility. If you would invest 810,560 in IDI Insurance on August 25, 2024 and sell it today you would earn a total of 522,440 from holding IDI Insurance or generate 64.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Levinstein Prop vs. IDI Insurance
Performance |
| Timeline |
| Levinstein Prop |
| IDI Insurance |
Levinstein Prop and IDI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Levinstein Prop and IDI Insurance
The main advantage of trading using opposite Levinstein Prop and IDI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Levinstein Prop position performs unexpectedly, IDI 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 IDI Insurance will offset losses from the drop in IDI Insurance's long position.| Levinstein Prop vs. Sella Real Estate | Levinstein Prop vs. Amot Investments | Levinstein Prop vs. Israel Canada | Levinstein Prop vs. YH Dimri Construction |
| IDI Insurance vs. Bank Hapoalim | IDI Insurance vs. Israel Discount Bank | IDI Insurance vs. Mizrahi Tefahot | IDI Insurance vs. Bezeq Israeli Telecommunication |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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