Correlation Between Menif Financial and Arad Investment
Can any of the company-specific risk be diversified away by investing in both Menif Financial and Arad Investment 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 Menif Financial and Arad Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Menif Financial Services and Arad Investment Industrial, you can compare the effects of market volatilities on Menif Financial and Arad Investment 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 Menif Financial with a short position of Arad Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Menif Financial and Arad Investment.
Diversification Opportunities for Menif Financial and Arad Investment
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Menif and Arad is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Menif Financial Services and Arad Investment Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arad Investment Indu and Menif Financial 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 Menif Financial Services are associated (or correlated) with Arad Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arad Investment Indu has no effect on the direction of Menif Financial i.e., Menif Financial and Arad Investment go up and down completely randomly.
Pair Corralation between Menif Financial and Arad Investment
Assuming the 90 days trading horizon Menif Financial Services is expected to generate 1.03 times more return on investment than Arad Investment. However, Menif Financial is 1.03 times more volatile than Arad Investment Industrial. It trades about 0.3 of its potential returns per unit of risk. Arad Investment Industrial is currently generating about 0.06 per unit of risk. If you would invest 160,700 in Menif Financial Services on October 23, 2024 and sell it today you would earn a total of 24,300 from holding Menif Financial Services or generate 15.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Menif Financial Services vs. Arad Investment Industrial
Performance |
| Timeline |
| Menif Financial Services |
| Arad Investment Indu |
Menif Financial and Arad Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Menif Financial and Arad Investment
The main advantage of trading using opposite Menif Financial and Arad Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Menif Financial position performs unexpectedly, Arad Investment 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 Arad Investment will offset losses from the drop in Arad Investment's long position.| Menif Financial vs. Hiron Trade Investments Industrial | Menif Financial vs. Arad Investment Industrial | Menif Financial vs. IBI Mutual Funds | Menif Financial vs. Meitav Dash Investments |
| Arad Investment vs. Arad | Arad Investment vs. Alony Hetz Properties | Arad Investment vs. Danel | Arad Investment vs. Airport City |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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