Correlation Between MEITAV INVESTMENTS and Multi Retail
Can any of the company-specific risk be diversified away by investing in both MEITAV INVESTMENTS and Multi Retail 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 Multi Retail 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 Multi Retail Group, you can compare the effects of market volatilities on MEITAV INVESTMENTS and Multi Retail 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 Multi Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEITAV INVESTMENTS and Multi Retail.
Diversification Opportunities for MEITAV INVESTMENTS and Multi Retail
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MEITAV and Multi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding MEITAV INVESTMENTS HOUSE and Multi Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Retail Group 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 Multi Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Retail Group has no effect on the direction of MEITAV INVESTMENTS i.e., MEITAV INVESTMENTS and Multi Retail go up and down completely randomly.
Pair Corralation between MEITAV INVESTMENTS and Multi Retail
Assuming the 90 days trading horizon MEITAV INVESTMENTS HOUSE is expected to generate 1.16 times more return on investment than Multi Retail. However, MEITAV INVESTMENTS is 1.16 times more volatile than Multi Retail Group. It trades about 0.53 of its potential returns per unit of risk. Multi Retail Group is currently generating about 0.02 per unit of risk. If you would invest 200,000 in MEITAV INVESTMENTS HOUSE on August 31, 2024 and sell it today you would earn a total of 69,100 from holding MEITAV INVESTMENTS HOUSE or generate 34.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEITAV INVESTMENTS HOUSE vs. Multi Retail Group
Performance |
| Timeline |
| MEITAV INVESTMENTS HOUSE |
| Multi Retail Group |
MEITAV INVESTMENTS and Multi Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEITAV INVESTMENTS and Multi Retail
The main advantage of trading using opposite MEITAV INVESTMENTS and Multi Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEITAV INVESTMENTS position performs unexpectedly, Multi Retail 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 Multi Retail will offset losses from the drop in Multi Retail's long position.| MEITAV INVESTMENTS vs. Multi Retail Group | MEITAV INVESTMENTS vs. Retailors | MEITAV INVESTMENTS vs. First International Bank | MEITAV INVESTMENTS vs. Harel Insurance Investments |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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