Correlation Between MeguREIT Israel and Reit 1
Can any of the company-specific risk be diversified away by investing in both MeguREIT Israel and Reit 1 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 MeguREIT Israel and Reit 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MeguREIT Israel and Reit 1, you can compare the effects of market volatilities on MeguREIT Israel and Reit 1 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 MeguREIT Israel with a short position of Reit 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeguREIT Israel and Reit 1.
Diversification Opportunities for MeguREIT Israel and Reit 1
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MeguREIT and Reit is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding MeguREIT Israel and Reit 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reit 1 and MeguREIT Israel 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 MeguREIT Israel are associated (or correlated) with Reit 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reit 1 has no effect on the direction of MeguREIT Israel i.e., MeguREIT Israel and Reit 1 go up and down completely randomly.
Pair Corralation between MeguREIT Israel and Reit 1
Assuming the 90 days trading horizon MeguREIT Israel is expected to generate 1.26 times more return on investment than Reit 1. However, MeguREIT Israel is 1.26 times more volatile than Reit 1. It trades about 0.16 of its potential returns per unit of risk. Reit 1 is currently generating about 0.18 per unit of risk. If you would invest 38,252 in MeguREIT Israel on August 29, 2024 and sell it today you would earn a total of 15,748 from holding MeguREIT Israel or generate 41.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MeguREIT Israel vs. Reit 1
Performance |
| Timeline |
| MeguREIT Israel |
| Reit 1 |
MeguREIT Israel and Reit 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MeguREIT Israel and Reit 1
The main advantage of trading using opposite MeguREIT Israel and Reit 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeguREIT Israel position performs unexpectedly, Reit 1 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 Reit 1 will offset losses from the drop in Reit 1's long position.| MeguREIT Israel vs. Nice | MeguREIT Israel vs. The Gold Bond | MeguREIT Israel vs. Bank Leumi Le Israel | MeguREIT Israel vs. ICL Israel Chemicals |
| Reit 1 vs. Israel Canada | Reit 1 vs. Delek Group | Reit 1 vs. Shikun Binui | Reit 1 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |