Correlation Between Nawi Brothers and Israel Discount
Can any of the company-specific risk be diversified away by investing in both Nawi Brothers and Israel Discount 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 Nawi Brothers and Israel Discount into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nawi Brothers Group and Israel Discount Bank, you can compare the effects of market volatilities on Nawi Brothers and Israel Discount 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 Nawi Brothers with a short position of Israel Discount. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nawi Brothers and Israel Discount.
Diversification Opportunities for Nawi Brothers and Israel Discount
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nawi and Israel is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Nawi Brothers Group and Israel Discount Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Discount Bank and Nawi Brothers 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 Nawi Brothers Group are associated (or correlated) with Israel Discount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Discount Bank has no effect on the direction of Nawi Brothers i.e., Nawi Brothers and Israel Discount go up and down completely randomly.
Pair Corralation between Nawi Brothers and Israel Discount
Assuming the 90 days trading horizon Nawi Brothers Group is expected to generate 1.35 times more return on investment than Israel Discount. However, Nawi Brothers is 1.35 times more volatile than Israel Discount Bank. It trades about 0.36 of its potential returns per unit of risk. Israel Discount Bank is currently generating about 0.26 per unit of risk. If you would invest 413,700 in Nawi Brothers Group on December 1, 2024 and sell it today you would earn a total of 50,400 from holding Nawi Brothers Group or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nawi Brothers Group vs. Israel Discount Bank
Performance |
| Timeline |
| Nawi Brothers Group |
| Israel Discount Bank |
Nawi Brothers and Israel Discount Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nawi Brothers and Israel Discount
The main advantage of trading using opposite Nawi Brothers and Israel Discount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nawi Brothers position performs unexpectedly, Israel Discount 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 Israel Discount will offset losses from the drop in Israel Discount's long position.| Nawi Brothers vs. Isracard | Nawi Brothers vs. Bank Hapoalim | Nawi Brothers vs. Tadiran Hldg | Nawi Brothers vs. Mizrahi Tefahot |
| Israel Discount vs. Bank Leumi Le Israel | Israel Discount vs. Bank Hapoalim | Israel Discount vs. Mizrahi Tefahot | Israel Discount vs. Bezeq Israeli Telecommunication |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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