Correlation Between Safe T and Itay Financial
Can any of the company-specific risk be diversified away by investing in both Safe T and Itay Financial 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 Safe T and Itay Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe T Group and Itay Financial AA, you can compare the effects of market volatilities on Safe T and Itay Financial 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 Safe T with a short position of Itay Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe T and Itay Financial.
Diversification Opportunities for Safe T and Itay Financial
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Safe and Itay is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Safe T Group and Itay Financial AA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itay Financial AA and Safe T 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 Safe T Group are associated (or correlated) with Itay Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itay Financial AA has no effect on the direction of Safe T i.e., Safe T and Itay Financial go up and down completely randomly.
Pair Corralation between Safe T and Itay Financial
Assuming the 90 days trading horizon Safe T Group is expected to under-perform the Itay Financial. But the stock apears to be less risky and, when comparing its historical volatility, Safe T Group is 1.2 times less risky than Itay Financial. The stock trades about -0.03 of its potential returns per unit of risk. The Itay Financial AA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 28,070 in Itay Financial AA on September 1, 2024 and sell it today you would earn a total of 4,350 from holding Itay Financial AA or generate 15.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safe T Group vs. Itay Financial AA
Performance |
| Timeline |
| Safe T Group |
| Itay Financial AA |
Safe T and Itay Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe T and Itay Financial
The main advantage of trading using opposite Safe T and Itay Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe T position performs unexpectedly, Itay Financial 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 Itay Financial will offset losses from the drop in Itay Financial's long position.| Safe T vs. Clal Insurance Enterprises | Safe T vs. First International Bank | Safe T vs. IDI Insurance | Safe T vs. Gilat Telecom Global |
| Itay Financial vs. Harel Insurance Investments | Itay Financial vs. Teuza A Fairchild | Itay Financial vs. Blender Financial Technologies | Itay Financial vs. Gamatronic Electronic 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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