Correlation Between Melisron and Israel Discount
Can any of the company-specific risk be diversified away by investing in both Melisron and Israel Discount 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 Melisron and Israel Discount into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melisron and Israel Discount Bank, you can compare the effects of market volatilities on Melisron and Israel Discount 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 Melisron with a short position of Israel Discount. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melisron and Israel Discount.
Diversification Opportunities for Melisron and Israel Discount
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Melisron and Israel is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Melisron and Israel Discount Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Discount Bank and Melisron 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 Melisron are associated (or correlated) with Israel Discount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Discount Bank has no effect on the direction of Melisron i.e., Melisron and Israel Discount go up and down completely randomly.
Pair Corralation between Melisron and Israel Discount
Assuming the 90 days trading horizon Melisron is expected to generate 1.45 times less return on investment than Israel Discount. But when comparing it to its historical volatility, Melisron is 1.0 times less risky than Israel Discount. It trades about 0.21 of its potential returns per unit of risk. Israel Discount Bank is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 200,700 in Israel Discount Bank on August 29, 2024 and sell it today you would earn a total of 47,600 from holding Israel Discount Bank or generate 23.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melisron vs. Israel Discount Bank
Performance |
| Timeline |
| Melisron |
| Israel Discount Bank |
Melisron and Israel Discount Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melisron and Israel Discount
The main advantage of trading using opposite Melisron and Israel Discount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melisron position performs unexpectedly, Israel Discount 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 Discount will offset losses from the drop in Israel Discount's long position.| Melisron vs. Azrieli Group | Melisron vs. Alony Hetz Properties | Melisron vs. Amot Investments | Melisron vs. Bank Leumi Le Israel |
| Israel Discount vs. Elbit Systems | Israel Discount vs. Discount Investment Corp | Israel Discount vs. Clal Insurance Enterprises | Israel Discount vs. AudioCodes |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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