Correlation Between Mizrahi Tefahot and EN Shoham
Can any of the company-specific risk be diversified away by investing in both Mizrahi Tefahot and EN Shoham 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 EN Shoham into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizrahi Tefahot and EN Shoham Business, you can compare the effects of market volatilities on Mizrahi Tefahot and EN Shoham 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 EN Shoham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizrahi Tefahot and EN Shoham.
Diversification Opportunities for Mizrahi Tefahot and EN Shoham
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mizrahi and SHOM is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mizrahi Tefahot and EN Shoham Business in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EN Shoham Business 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 EN Shoham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EN Shoham Business has no effect on the direction of Mizrahi Tefahot i.e., Mizrahi Tefahot and EN Shoham go up and down completely randomly.
Pair Corralation between Mizrahi Tefahot and EN Shoham
Assuming the 90 days trading horizon Mizrahi Tefahot is expected to generate 0.76 times more return on investment than EN Shoham. However, Mizrahi Tefahot is 1.31 times less risky than EN Shoham. It trades about 0.05 of its potential returns per unit of risk. EN Shoham Business is currently generating about 0.02 per unit of risk. If you would invest 1,138,254 in Mizrahi Tefahot on August 24, 2024 and sell it today you would earn a total of 461,746 from holding Mizrahi Tefahot or generate 40.57% 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. EN Shoham Business
Performance |
| Timeline |
| Mizrahi Tefahot |
| EN Shoham Business |
Mizrahi Tefahot and EN Shoham Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizrahi Tefahot and EN Shoham
The main advantage of trading using opposite Mizrahi Tefahot and EN Shoham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizrahi Tefahot position performs unexpectedly, EN Shoham 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 EN Shoham will offset losses from the drop in EN Shoham'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 |
| EN Shoham vs. Menif Financial Services | EN Shoham vs. Accel Solutions Group | EN Shoham vs. Rani Zim Shopping | EN Shoham vs. Mivtach Shamir |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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