Correlation Between Pluristem and Israel China
Can any of the company-specific risk be diversified away by investing in both Pluristem and Israel China 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 Pluristem and Israel China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pluristem and Israel China Biotechnology, you can compare the effects of market volatilities on Pluristem and Israel China 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 Pluristem with a short position of Israel China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pluristem and Israel China.
Diversification Opportunities for Pluristem and Israel China
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pluristem and Israel is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Pluristem and Israel China Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel China Biotech and Pluristem 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 Pluristem are associated (or correlated) with Israel China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel China Biotech has no effect on the direction of Pluristem i.e., Pluristem and Israel China go up and down completely randomly.
Pair Corralation between Pluristem and Israel China
Assuming the 90 days trading horizon Pluristem is expected to generate 1.23 times more return on investment than Israel China. However, Pluristem is 1.23 times more volatile than Israel China Biotechnology. It trades about 0.04 of its potential returns per unit of risk. Israel China Biotechnology is currently generating about -0.08 per unit of risk. If you would invest 192,000 in Pluristem on September 3, 2024 and sell it today you would earn a total of 9,000 from holding Pluristem or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pluristem vs. Israel China Biotechnology
Performance |
| Timeline |
| Pluristem |
| Israel China Biotech |
Pluristem and Israel China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pluristem and Israel China
The main advantage of trading using opposite Pluristem and Israel China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pluristem position performs unexpectedly, Israel China 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 China will offset losses from the drop in Israel China's long position.| Pluristem vs. Israel China Biotechnology | Pluristem vs. Amot Investments | Pluristem vs. Clal Biotechnology Industries | Pluristem vs. Ormat Technologies |
| Israel China vs. G Willi Food International | Israel China vs. TAT Technologies | Israel China vs. Sarine Technologies | Israel China vs. Clal Biotechnology Industries |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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