Correlation Between Mizrahi Tefahot and Willy Food
Can any of the company-specific risk be diversified away by investing in both Mizrahi Tefahot and Willy Food 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 Willy Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizrahi Tefahot and Willy Food, you can compare the effects of market volatilities on Mizrahi Tefahot and Willy Food 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 Willy Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizrahi Tefahot and Willy Food.
Diversification Opportunities for Mizrahi Tefahot and Willy Food
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mizrahi and Willy is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mizrahi Tefahot and Willy Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willy Food 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 Willy Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willy Food has no effect on the direction of Mizrahi Tefahot i.e., Mizrahi Tefahot and Willy Food go up and down completely randomly.
Pair Corralation between Mizrahi Tefahot and Willy Food
Assuming the 90 days trading horizon Mizrahi Tefahot is expected to generate 1.99 times less return on investment than Willy Food. But when comparing it to its historical volatility, Mizrahi Tefahot is 2.6 times less risky than Willy Food. It trades about 0.34 of its potential returns per unit of risk. Willy Food is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 206,900 in Willy Food on August 24, 2024 and sell it today you would earn a total of 26,100 from holding Willy Food or generate 12.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mizrahi Tefahot vs. Willy Food
Performance |
| Timeline |
| Mizrahi Tefahot |
| Willy Food |
Mizrahi Tefahot and Willy Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizrahi Tefahot and Willy Food
The main advantage of trading using opposite Mizrahi Tefahot and Willy Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizrahi Tefahot position performs unexpectedly, Willy Food 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 Willy Food will offset losses from the drop in Willy Food'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 |
| Willy Food vs. Rami Levi | Willy Food vs. Neto ME Holdings | Willy Food vs. Shufersal | Willy Food vs. Strauss Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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