Correlation Between Petrochemical and Israel Opportunity
Can any of the company-specific risk be diversified away by investing in both Petrochemical and Israel Opportunity 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 Petrochemical and Israel Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrochemical and Israel Opportunity , you can compare the effects of market volatilities on Petrochemical and Israel Opportunity 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 Petrochemical with a short position of Israel Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrochemical and Israel Opportunity.
Diversification Opportunities for Petrochemical and Israel Opportunity
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petrochemical and Israel is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Petrochemical and Israel Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Opportunity and Petrochemical 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 Petrochemical are associated (or correlated) with Israel Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Opportunity has no effect on the direction of Petrochemical i.e., Petrochemical and Israel Opportunity go up and down completely randomly.
Pair Corralation between Petrochemical and Israel Opportunity
Assuming the 90 days trading horizon Petrochemical is expected to under-perform the Israel Opportunity. But the stock apears to be less risky and, when comparing its historical volatility, Petrochemical is 5.81 times less risky than Israel Opportunity. The stock trades about -0.03 of its potential returns per unit of risk. The Israel Opportunity is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 8,300 in Israel Opportunity on November 22, 2024 and sell it today you would earn a total of 1,360 from holding Israel Opportunity or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrochemical vs. Israel Opportunity
Performance |
| Timeline |
| Petrochemical |
| Israel Opportunity |
Petrochemical and Israel Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrochemical and Israel Opportunity
The main advantage of trading using opposite Petrochemical and Israel Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrochemical position performs unexpectedly, Israel Opportunity 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 Opportunity will offset losses from the drop in Israel Opportunity's long position.| Petrochemical vs. Victory Supermarket Chain | Petrochemical vs. Menif Financial Services | Petrochemical vs. IDI Insurance | Petrochemical vs. Israel Discount Bank |
| Israel Opportunity vs. YD More Investments | Israel Opportunity vs. Azorim Investment Development | Israel Opportunity vs. Batm Advanced Communications | Israel Opportunity vs. Ram On Investments and |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |