Correlation Between Michman Basad and Isracard
Can any of the company-specific risk be diversified away by investing in both Michman Basad and Isracard 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 Michman Basad and Isracard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Michman Basad and Isracard, you can compare the effects of market volatilities on Michman Basad and Isracard 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 Michman Basad with a short position of Isracard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Michman Basad and Isracard.
Diversification Opportunities for Michman Basad and Isracard
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Michman and Isracard is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Michman Basad and Isracard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isracard and Michman Basad 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 Michman Basad are associated (or correlated) with Isracard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isracard has no effect on the direction of Michman Basad i.e., Michman Basad and Isracard go up and down completely randomly.
Pair Corralation between Michman Basad and Isracard
Assuming the 90 days trading horizon Michman Basad is expected to generate 1.01 times more return on investment than Isracard. However, Michman Basad is 1.01 times more volatile than Isracard. It trades about 0.33 of its potential returns per unit of risk. Isracard is currently generating about -0.03 per unit of risk. If you would invest 1,883,000 in Michman Basad on August 28, 2024 and sell it today you would earn a total of 135,000 from holding Michman Basad or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Michman Basad vs. Isracard
Performance |
| Timeline |
| Michman Basad |
| Isracard |
Michman Basad and Isracard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Michman Basad and Isracard
The main advantage of trading using opposite Michman Basad and Isracard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Michman Basad position performs unexpectedly, Isracard 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 Isracard will offset losses from the drop in Isracard's long position.| Michman Basad vs. Magic Software Enterprises | Michman Basad vs. Suny Cellular Communication | Michman Basad vs. RSL Electronics | Michman Basad vs. Inrom Construction Industries |
| Isracard vs. Bank Hapoalim | Isracard vs. Bank Leumi Le Israel | Isracard vs. Mizrahi Tefahot | Isracard vs. Israel Discount Bank |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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