Correlation Between YD More and Libra Insurance
Can any of the company-specific risk be diversified away by investing in both YD More and Libra 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 YD More and Libra Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YD More Investments and Libra Insurance, you can compare the effects of market volatilities on YD More and Libra 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 YD More with a short position of Libra Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of YD More and Libra Insurance.
Diversification Opportunities for YD More and Libra Insurance
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MRIN and Libra is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding YD More Investments and Libra Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libra Insurance and YD More 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 YD More Investments are associated (or correlated) with Libra Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libra Insurance has no effect on the direction of YD More i.e., YD More and Libra Insurance go up and down completely randomly.
Pair Corralation between YD More and Libra Insurance
Assuming the 90 days trading horizon YD More Investments is expected to generate 0.8 times more return on investment than Libra Insurance. However, YD More Investments is 1.24 times less risky than Libra Insurance. It trades about 0.26 of its potential returns per unit of risk. Libra Insurance is currently generating about 0.06 per unit of risk. If you would invest 145,400 in YD More Investments on December 11, 2024 and sell it today you would earn a total of 29,000 from holding YD More Investments or generate 19.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
YD More Investments vs. Libra Insurance
Performance |
| Timeline |
| YD More Investments |
| Libra Insurance |
YD More and Libra Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YD More and Libra Insurance
The main advantage of trading using opposite YD More and Libra Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YD More position performs unexpectedly, Libra 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 Libra Insurance will offset losses from the drop in Libra Insurance's long position.| YD More vs. Bank Leumi Le Israel | YD More vs. Mizrahi Tefahot | YD More vs. Israel Discount Bank | YD More vs. Bank Hapoalim |
| Libra Insurance vs. Hiron Trade Investments Industrial | Libra Insurance vs. Arad Investment Industrial | Libra Insurance vs. Adgar Investments and | Libra 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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