Correlation Between Polyram Plastic and Meitav Dash
Can any of the company-specific risk be diversified away by investing in both Polyram Plastic and Meitav Dash 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 Polyram Plastic and Meitav Dash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polyram Plastic Industries and Meitav Dash Investments, you can compare the effects of market volatilities on Polyram Plastic and Meitav Dash 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 Polyram Plastic with a short position of Meitav Dash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polyram Plastic and Meitav Dash.
Diversification Opportunities for Polyram Plastic and Meitav Dash
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polyram and Meitav is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Polyram Plastic Industries and Meitav Dash Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meitav Dash Investments and Polyram Plastic 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 Polyram Plastic Industries are associated (or correlated) with Meitav Dash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meitav Dash Investments has no effect on the direction of Polyram Plastic i.e., Polyram Plastic and Meitav Dash go up and down completely randomly.
Pair Corralation between Polyram Plastic and Meitav Dash
Assuming the 90 days trading horizon Polyram Plastic is expected to generate 1.66 times less return on investment than Meitav Dash. But when comparing it to its historical volatility, Polyram Plastic Industries is 1.21 times less risky than Meitav Dash. It trades about 0.13 of its potential returns per unit of risk. Meitav Dash Investments is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 117,900 in Meitav Dash Investments on August 25, 2024 and sell it today you would earn a total of 122,100 from holding Meitav Dash Investments or generate 103.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polyram Plastic Industries vs. Meitav Dash Investments
Performance |
| Timeline |
| Polyram Plastic Indu |
| Meitav Dash Investments |
Polyram Plastic and Meitav Dash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polyram Plastic and Meitav Dash
The main advantage of trading using opposite Polyram Plastic and Meitav Dash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polyram Plastic position performs unexpectedly, Meitav Dash 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 Meitav Dash will offset losses from the drop in Meitav Dash's long position.| Polyram Plastic vs. Rimoni | Polyram Plastic vs. Kafrit | Polyram Plastic vs. Brainsway | Polyram Plastic vs. Mivne Real Estate |
| Meitav Dash vs. One Software Technologies | Meitav Dash vs. YH Dimri Construction | Meitav Dash vs. Suny Cellular Communication | Meitav Dash vs. First International 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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