Correlation Between Mizrahi Tefahot and Delek Automotive
Can any of the company-specific risk be diversified away by investing in both Mizrahi Tefahot and Delek Automotive 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 Delek Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizrahi Tefahot and Delek Automotive Systems, you can compare the effects of market volatilities on Mizrahi Tefahot and Delek Automotive 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 Delek Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizrahi Tefahot and Delek Automotive.
Diversification Opportunities for Mizrahi Tefahot and Delek Automotive
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mizrahi and Delek is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mizrahi Tefahot and Delek Automotive Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Automotive Systems 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 Delek Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Automotive Systems has no effect on the direction of Mizrahi Tefahot i.e., Mizrahi Tefahot and Delek Automotive go up and down completely randomly.
Pair Corralation between Mizrahi Tefahot and Delek Automotive
Assuming the 90 days trading horizon Mizrahi Tefahot is expected to generate 3.84 times less return on investment than Delek Automotive. But when comparing it to its historical volatility, Mizrahi Tefahot is 1.98 times less risky than Delek Automotive. It trades about 0.14 of its potential returns per unit of risk. Delek Automotive Systems is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 231,200 in Delek Automotive Systems on September 1, 2024 and sell it today you would earn a total of 25,400 from holding Delek Automotive Systems or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mizrahi Tefahot vs. Delek Automotive Systems
Performance |
| Timeline |
| Mizrahi Tefahot |
| Delek Automotive Systems |
Mizrahi Tefahot and Delek Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizrahi Tefahot and Delek Automotive
The main advantage of trading using opposite Mizrahi Tefahot and Delek Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizrahi Tefahot position performs unexpectedly, Delek Automotive 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 Delek Automotive will offset losses from the drop in Delek Automotive's long position.| Mizrahi Tefahot vs. Bank Leumi Le Israel | Mizrahi Tefahot vs. Bank Hapoalim | Mizrahi Tefahot vs. Israel Discount Bank | Mizrahi Tefahot vs. First International Bank |
| Delek Automotive vs. El Al Israel | Delek Automotive vs. Magic Software Enterprises | Delek Automotive vs. Neto Malinda | Delek Automotive vs. Orbit Technologies |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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