Correlation Between Meitav Dash and Retailors
Can any of the company-specific risk be diversified away by investing in both Meitav Dash and Retailors 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 Dash and Retailors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meitav Dash Investments and Retailors, you can compare the effects of market volatilities on Meitav Dash and Retailors 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 Dash with a short position of Retailors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meitav Dash and Retailors.
Diversification Opportunities for Meitav Dash and Retailors
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meitav and Retailors is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Meitav Dash Investments and Retailors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retailors and Meitav Dash 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 Dash Investments are associated (or correlated) with Retailors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retailors has no effect on the direction of Meitav Dash i.e., Meitav Dash and Retailors go up and down completely randomly.
Pair Corralation between Meitav Dash and Retailors
Assuming the 90 days trading horizon Meitav Dash Investments is expected to generate 0.96 times more return on investment than Retailors. However, Meitav Dash Investments is 1.04 times less risky than Retailors. It trades about 0.54 of its potential returns per unit of risk. Retailors is currently generating about 0.15 per unit of risk. If you would invest 199,700 in Meitav Dash Investments on September 1, 2024 and sell it today you would earn a total of 69,400 from holding Meitav Dash Investments or generate 34.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meitav Dash Investments vs. Retailors
Performance |
| Timeline |
| Meitav Dash Investments |
| Retailors |
Meitav Dash and Retailors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meitav Dash and Retailors
The main advantage of trading using opposite Meitav Dash and Retailors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meitav Dash position performs unexpectedly, Retailors 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 Retailors will offset losses from the drop in Retailors' long position.| Meitav Dash vs. Homebiogas | Meitav Dash vs. Payment Financial Technologies | Meitav Dash vs. MediPress Health Limited Partnership | Meitav Dash vs. Clal Biotechnology Industries |
| Retailors vs. Nice | Retailors vs. The Gold Bond | Retailors vs. Bank Leumi Le Israel | Retailors vs. ICL Israel Chemicals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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