Correlation Between Shikun Binui and Israel Discount
Can any of the company-specific risk be diversified away by investing in both Shikun Binui and Israel Discount 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 Shikun Binui and Israel Discount into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shikun Binui and Israel Discount Bank, you can compare the effects of market volatilities on Shikun Binui and Israel Discount 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 Shikun Binui with a short position of Israel Discount. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shikun Binui and Israel Discount.
Diversification Opportunities for Shikun Binui and Israel Discount
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shikun and Israel is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shikun Binui and Israel Discount Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Discount Bank and Shikun Binui 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 Shikun Binui are associated (or correlated) with Israel Discount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Discount Bank has no effect on the direction of Shikun Binui i.e., Shikun Binui and Israel Discount go up and down completely randomly.
Pair Corralation between Shikun Binui and Israel Discount
Assuming the 90 days trading horizon Shikun Binui is expected to generate 1.06 times less return on investment than Israel Discount. In addition to that, Shikun Binui is 1.55 times more volatile than Israel Discount Bank. It trades about 0.17 of its total potential returns per unit of risk. Israel Discount Bank is currently generating about 0.28 per unit of volatility. If you would invest 200,600 in Israel Discount Bank on August 28, 2024 and sell it today you would earn a total of 42,600 from holding Israel Discount Bank or generate 21.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shikun Binui vs. Israel Discount Bank
Performance |
| Timeline |
| Shikun Binui |
| Israel Discount Bank |
Shikun Binui and Israel Discount Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shikun Binui and Israel Discount
The main advantage of trading using opposite Shikun Binui and Israel Discount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shikun Binui position performs unexpectedly, Israel Discount 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 Discount will offset losses from the drop in Israel Discount's long position.| Shikun Binui vs. Arad | Shikun Binui vs. Alony Hetz Properties | Shikun Binui vs. Danel | Shikun Binui vs. Airport City |
| Israel Discount vs. Bank Leumi Le Israel | Israel Discount vs. Bank Hapoalim | Israel Discount vs. Mizrahi Tefahot | Israel Discount vs. Bezeq Israeli Telecommunication |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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