Correlation Between Peninsula and Isracard
Can any of the company-specific risk be diversified away by investing in both Peninsula and Isracard 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 Peninsula and Isracard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peninsula Group and Isracard, you can compare the effects of market volatilities on Peninsula and Isracard 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 Peninsula with a short position of Isracard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peninsula and Isracard.
Diversification Opportunities for Peninsula and Isracard
Very weak diversification
The 3 months correlation between Peninsula and Isracard is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Peninsula Group and Isracard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isracard and Peninsula 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 Peninsula Group are associated (or correlated) with Isracard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isracard has no effect on the direction of Peninsula i.e., Peninsula and Isracard go up and down completely randomly.
Pair Corralation between Peninsula and Isracard
Assuming the 90 days trading horizon Peninsula Group is expected to generate 1.01 times more return on investment than Isracard. However, Peninsula is 1.01 times more volatile than Isracard. It trades about 0.07 of its potential returns per unit of risk. Isracard is currently generating about 0.05 per unit of risk. If you would invest 13,215 in Peninsula Group on November 19, 2024 and sell it today you would earn a total of 8,485 from holding Peninsula Group or generate 64.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peninsula Group vs. Isracard
Performance |
| Timeline |
| Peninsula Group |
| Isracard |
Peninsula and Isracard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peninsula and Isracard
The main advantage of trading using opposite Peninsula and Isracard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peninsula position performs unexpectedly, Isracard 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 Isracard will offset losses from the drop in Isracard's long position.| Peninsula vs. Opal Balance | Peninsula vs. Nawi Brothers Group | Peninsula vs. Mizrahi Tefahot | Peninsula vs. SR Accord |
| Isracard vs. Bank Hapoalim | Isracard vs. Bank Leumi Le Israel | Isracard vs. Mizrahi Tefahot | Isracard vs. Israel Discount 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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