Correlation Between Mizrahi Tefahot and Amot Investments
Can any of the company-specific risk be diversified away by investing in both Mizrahi Tefahot and Amot Investments 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 Mizrahi Tefahot and Amot Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizrahi Tefahot and Amot Investments, you can compare the effects of market volatilities on Mizrahi Tefahot and Amot Investments 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 Mizrahi Tefahot with a short position of Amot Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizrahi Tefahot and Amot Investments.
Diversification Opportunities for Mizrahi Tefahot and Amot Investments
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mizrahi and Amot is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mizrahi Tefahot and Amot Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amot Investments and Mizrahi Tefahot 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 Mizrahi Tefahot are associated (or correlated) with Amot Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amot Investments has no effect on the direction of Mizrahi Tefahot i.e., Mizrahi Tefahot and Amot Investments go up and down completely randomly.
Pair Corralation between Mizrahi Tefahot and Amot Investments
Assuming the 90 days trading horizon Mizrahi Tefahot is expected to generate 1.37 times more return on investment than Amot Investments. However, Mizrahi Tefahot is 1.37 times more volatile than Amot Investments. It trades about -0.06 of its potential returns per unit of risk. Amot Investments is currently generating about -0.73 per unit of risk. If you would invest 1,719,489 in Mizrahi Tefahot on December 8, 2024 and sell it today you would lose (29,646) from holding Mizrahi Tefahot or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mizrahi Tefahot vs. Amot Investments
Performance |
| Timeline |
| Mizrahi Tefahot |
| Amot Investments |
Mizrahi Tefahot and Amot Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizrahi Tefahot and Amot Investments
The main advantage of trading using opposite Mizrahi Tefahot and Amot Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizrahi Tefahot position performs unexpectedly, Amot Investments 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 Amot Investments will offset losses from the drop in Amot Investments' long position.| Mizrahi Tefahot vs. Bank Leumi Le Israel | ||
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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