Correlation Between Mizrahi Tefahot and Isracard
Can any of the company-specific risk be diversified away by investing in both Mizrahi Tefahot and Isracard 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 Isracard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizrahi Tefahot and Isracard, you can compare the effects of market volatilities on Mizrahi Tefahot and Isracard 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 Isracard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizrahi Tefahot and Isracard.
Diversification Opportunities for Mizrahi Tefahot and Isracard
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mizrahi and Isracard is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mizrahi Tefahot and Isracard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isracard 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 Isracard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isracard has no effect on the direction of Mizrahi Tefahot i.e., Mizrahi Tefahot and Isracard go up and down completely randomly.
Pair Corralation between Mizrahi Tefahot and Isracard
Assuming the 90 days trading horizon Mizrahi Tefahot is expected to generate 0.93 times more return on investment than Isracard. However, Mizrahi Tefahot is 1.08 times less risky than Isracard. It trades about 0.44 of its potential returns per unit of risk. Isracard is currently generating about -0.03 per unit of risk. If you would invest 1,504,000 in Mizrahi Tefahot on August 29, 2024 and sell it today you would earn a total of 135,000 from holding Mizrahi Tefahot or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mizrahi Tefahot vs. Isracard
Performance |
| Timeline |
| Mizrahi Tefahot |
| Isracard |
Mizrahi Tefahot and Isracard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizrahi Tefahot and Isracard
The main advantage of trading using opposite Mizrahi Tefahot and Isracard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizrahi Tefahot position performs unexpectedly, Isracard 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 Isracard will offset losses from the drop in Isracard'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 |
| Isracard vs. Bank Hapoalim | Isracard vs. Bank Leumi Le Israel | Isracard vs. Mizrahi Tefahot | Isracard vs. Israel Discount Bank |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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