Correlation Between Nextgen and Israel Canada
Can any of the company-specific risk be diversified away by investing in both Nextgen and Israel Canada 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 Nextgen and Israel Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextgen and Israel Canada, you can compare the effects of market volatilities on Nextgen and Israel Canada 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 Nextgen with a short position of Israel Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextgen and Israel Canada.
Diversification Opportunities for Nextgen and Israel Canada
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nextgen and Israel is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nextgen and Israel Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Canada and Nextgen 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 Nextgen are associated (or correlated) with Israel Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Canada has no effect on the direction of Nextgen i.e., Nextgen and Israel Canada go up and down completely randomly.
Pair Corralation between Nextgen and Israel Canada
Assuming the 90 days trading horizon Nextgen is expected to under-perform the Israel Canada. In addition to that, Nextgen is 2.26 times more volatile than Israel Canada. It trades about -0.05 of its total potential returns per unit of risk. Israel Canada is currently generating about 0.1 per unit of volatility. If you would invest 89,409 in Israel Canada on September 1, 2024 and sell it today you would earn a total of 55,591 from holding Israel Canada or generate 62.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Nextgen vs. Israel Canada
Performance |
| Timeline |
| Nextgen |
| Israel Canada |
Nextgen and Israel Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextgen and Israel Canada
The main advantage of trading using opposite Nextgen and Israel Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextgen position performs unexpectedly, Israel Canada 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 Canada will offset losses from the drop in Israel Canada's long position.| Nextgen vs. RSL Electronics | Nextgen vs. First International Bank | Nextgen vs. GODM Investments | Nextgen vs. Amot Investments |
| Israel Canada vs. Azrieli Group | Israel Canada vs. Shikun Binui | Israel Canada vs. Ashtrom Group | Israel Canada vs. Enlight Renewable Energy |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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