Correlation Between MEITAV INVESTMENTS and Inbar Group
Can any of the company-specific risk be diversified away by investing in both MEITAV INVESTMENTS and Inbar Group 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 MEITAV INVESTMENTS and Inbar Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEITAV INVESTMENTS HOUSE and Inbar Group Finance, you can compare the effects of market volatilities on MEITAV INVESTMENTS and Inbar Group 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 MEITAV INVESTMENTS with a short position of Inbar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEITAV INVESTMENTS and Inbar Group.
Diversification Opportunities for MEITAV INVESTMENTS and Inbar Group
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MEITAV and Inbar is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding MEITAV INVESTMENTS HOUSE and Inbar Group Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inbar Group Finance and MEITAV INVESTMENTS 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 MEITAV INVESTMENTS HOUSE are associated (or correlated) with Inbar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inbar Group Finance has no effect on the direction of MEITAV INVESTMENTS i.e., MEITAV INVESTMENTS and Inbar Group go up and down completely randomly.
Pair Corralation between MEITAV INVESTMENTS and Inbar Group
Assuming the 90 days trading horizon MEITAV INVESTMENTS HOUSE is expected to generate 0.69 times more return on investment than Inbar Group. However, MEITAV INVESTMENTS HOUSE is 1.45 times less risky than Inbar Group. It trades about 0.55 of its potential returns per unit of risk. Inbar Group Finance is currently generating about 0.3 per unit of risk. If you would invest 196,397 in MEITAV INVESTMENTS HOUSE on September 4, 2024 and sell it today you would earn a total of 67,592 from holding MEITAV INVESTMENTS HOUSE or generate 34.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.44% |
| Values | Daily Returns |
MEITAV INVESTMENTS HOUSE vs. Inbar Group Finance
Performance |
| Timeline |
| MEITAV INVESTMENTS HOUSE |
| Inbar Group Finance |
MEITAV INVESTMENTS and Inbar Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEITAV INVESTMENTS and Inbar Group
The main advantage of trading using opposite MEITAV INVESTMENTS and Inbar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEITAV INVESTMENTS position performs unexpectedly, Inbar Group 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 Inbar Group will offset losses from the drop in Inbar Group's long position.| MEITAV INVESTMENTS vs. Nice | MEITAV INVESTMENTS vs. The Gold Bond | MEITAV INVESTMENTS vs. Bank Leumi Le Israel | MEITAV INVESTMENTS vs. ICL Israel Chemicals |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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