Correlation Between Tel Aviv and Aerodrome
Can any of the company-specific risk be diversified away by investing in both Tel Aviv and Aerodrome 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 Tel Aviv and Aerodrome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tel Aviv 35 and Aerodrome Group, you can compare the effects of market volatilities on Tel Aviv and Aerodrome 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 Tel Aviv with a short position of Aerodrome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tel Aviv and Aerodrome.
Diversification Opportunities for Tel Aviv and Aerodrome
Poor diversification
The 3 months correlation between Tel and Aerodrome is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tel Aviv 35 and Aerodrome Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerodrome Group and Tel Aviv 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 Tel Aviv 35 are associated (or correlated) with Aerodrome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerodrome Group has no effect on the direction of Tel Aviv i.e., Tel Aviv and Aerodrome go up and down completely randomly.
Pair Corralation between Tel Aviv and Aerodrome
Assuming the 90 days trading horizon Tel Aviv 35 is expected to generate 0.12 times more return on investment than Aerodrome. However, Tel Aviv 35 is 8.54 times less risky than Aerodrome. It trades about 0.28 of its potential returns per unit of risk. Aerodrome Group is currently generating about -0.02 per unit of risk. If you would invest 217,424 in Tel Aviv 35 on August 26, 2024 and sell it today you would earn a total of 8,591 from holding Tel Aviv 35 or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tel Aviv 35 vs. Aerodrome Group
Performance |
| Timeline |
Tel Aviv and Aerodrome Volatility Contrast
Predicted Return Density |
| Returns |
Tel Aviv 35
Pair trading matchups for Tel Aviv
Aerodrome Group
Pair trading matchups for Aerodrome
Pair Trading with Tel Aviv and Aerodrome
The main advantage of trading using opposite Tel Aviv and Aerodrome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tel Aviv position performs unexpectedly, Aerodrome 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 Aerodrome will offset losses from the drop in Aerodrome's long position.| Tel Aviv vs. Feat Fund Investments | Tel Aviv vs. Libra Insurance | Tel Aviv vs. Blender Financial Technologies | Tel Aviv vs. Clal Insurance Enterprises |
| Aerodrome vs. Hiron Trade Investments Industrial | Aerodrome vs. Analyst IMS Investment | Aerodrome vs. GODM Investments | Aerodrome vs. Libra Insurance |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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