Correlation Between Scope Metals and Itay Financial
Can any of the company-specific risk be diversified away by investing in both Scope Metals 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 Scope Metals and Itay Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scope Metals Group and Itay Financial AA, you can compare the effects of market volatilities on Scope Metals 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 Scope Metals with a short position of Itay Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scope Metals and Itay Financial.
Diversification Opportunities for Scope Metals and Itay Financial
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scope and Itay is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Scope Metals 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 Scope Metals 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 Scope Metals 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 Scope Metals i.e., Scope Metals and Itay Financial go up and down completely randomly.
Pair Corralation between Scope Metals and Itay Financial
Assuming the 90 days trading horizon Scope Metals is expected to generate 2.01 times less return on investment than Itay Financial. But when comparing it to its historical volatility, Scope Metals Group is 1.48 times less risky than Itay Financial. It trades about 0.36 of its potential returns per unit of risk. Itay Financial AA is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 27,000 in Itay Financial AA on September 13, 2024 and sell it today you would earn a total of 11,900 from holding Itay Financial AA or generate 44.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scope Metals Group vs. Itay Financial AA
Performance |
| Timeline |
| Scope Metals Group |
| Itay Financial AA |
Scope Metals and Itay Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scope Metals and Itay Financial
The main advantage of trading using opposite Scope Metals and Itay Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scope Metals 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.| Scope Metals vs. Delek Automotive Systems | Scope Metals vs. Kerur Holdings | Scope Metals vs. Neto ME Holdings | Scope Metals vs. Bank Leumi Le Israel |
| Itay Financial vs. Direct Capital Investments | Itay Financial vs. Netz Hotels | Itay Financial vs. Opal Balance | Itay Financial vs. B Communications |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |