Correlation Between RSL Electronics and First International
Can any of the company-specific risk be diversified away by investing in both RSL Electronics and First International 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 RSL Electronics and First International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RSL Electronics and First International Bank, you can compare the effects of market volatilities on RSL Electronics and First International 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 RSL Electronics with a short position of First International. Check out your portfolio center. Please also check ongoing floating volatility patterns of RSL Electronics and First International.
Diversification Opportunities for RSL Electronics and First International
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RSL and First is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding RSL Electronics and First International Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First International Bank and RSL Electronics 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 RSL Electronics are associated (or correlated) with First International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First International Bank has no effect on the direction of RSL Electronics i.e., RSL Electronics and First International go up and down completely randomly.
Pair Corralation between RSL Electronics and First International
Assuming the 90 days trading horizon RSL Electronics is expected to generate 2.82 times more return on investment than First International. However, RSL Electronics is 2.82 times more volatile than First International Bank. It trades about 0.63 of its potential returns per unit of risk. First International Bank is currently generating about 0.06 per unit of risk. If you would invest 114,500 in RSL Electronics on November 27, 2024 and sell it today you would earn a total of 41,400 from holding RSL Electronics or generate 36.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RSL Electronics vs. First International Bank
Performance |
| Timeline |
| RSL Electronics |
| First International Bank |
RSL Electronics and First International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RSL Electronics and First International
The main advantage of trading using opposite RSL Electronics and First International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RSL Electronics position performs unexpectedly, First International 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 First International will offset losses from the drop in First International's long position.| RSL Electronics vs. Hiron Trade Investments Industrial | RSL Electronics vs. B Communications | RSL Electronics vs. Ram On Investments and | RSL Electronics vs. Sure Tech Investments LP |
| First International vs. Israel Discount Bank | First International vs. Mizrahi Tefahot | First International vs. Bank Leumi Le Israel | First International vs. Bank Hapoalim |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |