Correlation Between Tel Aviv and Bonei Hatichon
Can any of the company-specific risk be diversified away by investing in both Tel Aviv and Bonei Hatichon 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 Bonei Hatichon 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 Bonei Hatichon Civil, you can compare the effects of market volatilities on Tel Aviv and Bonei Hatichon 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 Bonei Hatichon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tel Aviv and Bonei Hatichon.
Diversification Opportunities for Tel Aviv and Bonei Hatichon
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tel and Bonei is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Tel Aviv 35 and Bonei Hatichon Civil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonei Hatichon Civil 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 Bonei Hatichon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonei Hatichon Civil has no effect on the direction of Tel Aviv i.e., Tel Aviv and Bonei Hatichon go up and down completely randomly.
Pair Corralation between Tel Aviv and Bonei Hatichon
Assuming the 90 days trading horizon Tel Aviv 35 is expected to under-perform the Bonei Hatichon. But the index apears to be less risky and, when comparing its historical volatility, Tel Aviv 35 is 2.4 times less risky than Bonei Hatichon. The index trades about 0.0 of its potential returns per unit of risk. The Bonei Hatichon Civil is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 443,900 in Bonei Hatichon Civil on November 28, 2024 and sell it today you would earn a total of 95,200 from holding Bonei Hatichon Civil or generate 21.45% 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. Bonei Hatichon Civil
Performance |
| Timeline |
Tel Aviv and Bonei Hatichon Volatility Contrast
Predicted Return Density |
| Returns |
Tel Aviv 35
Pair trading matchups for Tel Aviv
Bonei Hatichon Civil
Pair trading matchups for Bonei Hatichon
Pair Trading with Tel Aviv and Bonei Hatichon
The main advantage of trading using opposite Tel Aviv and Bonei Hatichon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tel Aviv position performs unexpectedly, Bonei Hatichon 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 Bonei Hatichon will offset losses from the drop in Bonei Hatichon's long position.| Tel Aviv vs. Menif Financial Services | Tel Aviv vs. WhiteSmoke Software | Tel Aviv vs. Harel Insurance Investments | Tel Aviv vs. First International Bank |
| Bonei Hatichon vs. Suny Cellular Communication | Bonei Hatichon vs. ICL Israel Chemicals | Bonei Hatichon vs. Inrom Construction Industries | Bonei Hatichon 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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