Correlation Between Mizrahi Tefahot and Apollo Power
Can any of the company-specific risk be diversified away by investing in both Mizrahi Tefahot and Apollo Power 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 Apollo Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizrahi Tefahot and Apollo Power, you can compare the effects of market volatilities on Mizrahi Tefahot and Apollo Power 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 Apollo Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizrahi Tefahot and Apollo Power.
Diversification Opportunities for Mizrahi Tefahot and Apollo Power
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mizrahi and Apollo is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mizrahi Tefahot and Apollo Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Power 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 Apollo Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Power has no effect on the direction of Mizrahi Tefahot i.e., Mizrahi Tefahot and Apollo Power go up and down completely randomly.
Pair Corralation between Mizrahi Tefahot and Apollo Power
Assuming the 90 days trading horizon Mizrahi Tefahot is expected to generate 0.37 times more return on investment than Apollo Power. However, Mizrahi Tefahot is 2.68 times less risky than Apollo Power. It trades about 0.24 of its potential returns per unit of risk. Apollo Power is currently generating about -0.46 per unit of risk. If you would invest 1,386,000 in Mizrahi Tefahot on August 28, 2024 and sell it today you would earn a total of 234,000 from holding Mizrahi Tefahot or generate 16.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mizrahi Tefahot vs. Apollo Power
Performance |
| Timeline |
| Mizrahi Tefahot |
| Apollo Power |
Mizrahi Tefahot and Apollo Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizrahi Tefahot and Apollo Power
The main advantage of trading using opposite Mizrahi Tefahot and Apollo Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizrahi Tefahot position performs unexpectedly, Apollo Power 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 Apollo Power will offset losses from the drop in Apollo Power's long position.| Mizrahi Tefahot vs. Bank Hapoalim | Mizrahi Tefahot vs. Israel Discount Bank | Mizrahi Tefahot vs. Bezeq Israeli Telecommunication | Mizrahi Tefahot vs. Elbit Systems |
| Apollo Power vs. Retailors | Apollo Power vs. Batm Advanced Communications | Apollo Power vs. Clal Biotechnology Industries | Apollo Power vs. Golan Plastic |
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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