Correlation Between Meitav Trade and Michman Basad
Can any of the company-specific risk be diversified away by investing in both Meitav Trade and Michman Basad 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 Trade and Michman Basad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meitav Trade Inv and Michman Basad, you can compare the effects of market volatilities on Meitav Trade and Michman Basad 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 Trade with a short position of Michman Basad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meitav Trade and Michman Basad.
Diversification Opportunities for Meitav Trade and Michman Basad
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meitav and Michman is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Meitav Trade Inv and Michman Basad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Michman Basad and Meitav Trade 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 Trade Inv are associated (or correlated) with Michman Basad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Michman Basad has no effect on the direction of Meitav Trade i.e., Meitav Trade and Michman Basad go up and down completely randomly.
Pair Corralation between Meitav Trade and Michman Basad
Assuming the 90 days trading horizon Meitav Trade Inv is expected to generate 0.99 times more return on investment than Michman Basad. However, Meitav Trade Inv is 1.01 times less risky than Michman Basad. It trades about 0.69 of its potential returns per unit of risk. Michman Basad is currently generating about 0.46 per unit of risk. If you would invest 961.00 in Meitav Trade Inv on September 1, 2024 and sell it today you would earn a total of 184.00 from holding Meitav Trade Inv or generate 19.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meitav Trade Inv vs. Michman Basad
Performance |
| Timeline |
| Meitav Trade Inv |
| Michman Basad |
Meitav Trade and Michman Basad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meitav Trade and Michman Basad
The main advantage of trading using opposite Meitav Trade and Michman Basad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meitav Trade position performs unexpectedly, Michman Basad 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 Michman Basad will offset losses from the drop in Michman Basad's long position.| Meitav Trade vs. Nice | Meitav Trade vs. The Gold Bond | Meitav Trade vs. Bank Leumi Le Israel | Meitav Trade vs. ICL Israel Chemicals |
| Michman Basad vs. Meitav Trade Inv | Michman Basad vs. Shagrir Group Vehicle | Michman Basad vs. Willy Food | Michman Basad vs. Millennium Food Tech LP |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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