Correlation Between Retailors and Meitav Dash
Can any of the company-specific risk be diversified away by investing in both Retailors 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 Retailors and Meitav Dash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retailors and Meitav Dash Investments, you can compare the effects of market volatilities on Retailors 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 Retailors with a short position of Meitav Dash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retailors and Meitav Dash.
Diversification Opportunities for Retailors and Meitav Dash
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Retailors and Meitav is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Retailors 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 Retailors 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 Retailors 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 Retailors i.e., Retailors and Meitav Dash go up and down completely randomly.
Pair Corralation between Retailors and Meitav Dash
Assuming the 90 days trading horizon Retailors is expected to generate 3.37 times less return on investment than Meitav Dash. In addition to that, Retailors is 1.04 times more volatile than Meitav Dash Investments. It trades about 0.15 of its total potential returns per unit of risk. Meitav Dash Investments is currently generating about 0.54 per unit of volatility. If you would invest 199,700 in Meitav Dash Investments on September 1, 2024 and sell it today you would earn a total of 69,400 from holding Meitav Dash Investments or generate 34.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retailors vs. Meitav Dash Investments
Performance |
| Timeline |
| Retailors |
| Meitav Dash Investments |
Retailors and Meitav Dash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retailors and Meitav Dash
The main advantage of trading using opposite Retailors and Meitav Dash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retailors 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.| Retailors vs. Nice | Retailors vs. The Gold Bond | Retailors vs. Bank Leumi Le Israel | Retailors vs. ICL Israel Chemicals |
| Meitav Dash vs. Homebiogas | Meitav Dash vs. Payment Financial Technologies | Meitav Dash vs. MediPress Health Limited Partnership | Meitav Dash 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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