Correlation Between Mizrahi Tefahot and Nice
Can any of the company-specific risk be diversified away by investing in both Mizrahi Tefahot and Nice 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 Nice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizrahi Tefahot and Nice, you can compare the effects of market volatilities on Mizrahi Tefahot and Nice 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 Nice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizrahi Tefahot and Nice.
Diversification Opportunities for Mizrahi Tefahot and Nice
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mizrahi and Nice is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mizrahi Tefahot and Nice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice 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 Nice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice has no effect on the direction of Mizrahi Tefahot i.e., Mizrahi Tefahot and Nice go up and down completely randomly.
Pair Corralation between Mizrahi Tefahot and Nice
Assuming the 90 days trading horizon Mizrahi Tefahot is expected to generate 0.48 times more return on investment than Nice. However, Mizrahi Tefahot is 2.07 times less risky than Nice. It trades about 0.26 of its potential returns per unit of risk. Nice is currently generating about 0.03 per unit of risk. If you would invest 1,385,000 in Mizrahi Tefahot on August 29, 2024 and sell it today you would earn a total of 254,000 from holding Mizrahi Tefahot or generate 18.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mizrahi Tefahot vs. Nice
Performance |
| Timeline |
| Mizrahi Tefahot |
| Nice |
Mizrahi Tefahot and Nice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizrahi Tefahot and Nice
The main advantage of trading using opposite Mizrahi Tefahot and Nice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizrahi Tefahot position performs unexpectedly, Nice 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 Nice will offset losses from the drop in Nice'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 |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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