Correlation Between Tel Aviv and Emilia Devel
Can any of the company-specific risk be diversified away by investing in both Tel Aviv and Emilia Devel 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 Emilia Devel 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 Emilia Devel, you can compare the effects of market volatilities on Tel Aviv and Emilia Devel 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 Emilia Devel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tel Aviv and Emilia Devel.
Diversification Opportunities for Tel Aviv and Emilia Devel
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tel and Emilia is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tel Aviv 35 and Emilia Devel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emilia Devel 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 Emilia Devel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emilia Devel has no effect on the direction of Tel Aviv i.e., Tel Aviv and Emilia Devel go up and down completely randomly.
Pair Corralation between Tel Aviv and Emilia Devel
Assuming the 90 days trading horizon Tel Aviv is expected to generate 1.33 times less return on investment than Emilia Devel. But when comparing it to its historical volatility, Tel Aviv 35 is 2.18 times less risky than Emilia Devel. It trades about 0.36 of its potential returns per unit of risk. Emilia Devel is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 204,500 in Emilia Devel on August 25, 2024 and sell it today you would earn a total of 27,500 from holding Emilia Devel or generate 13.45% 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. Emilia Devel
Performance |
| Timeline |
Tel Aviv and Emilia Devel Volatility Contrast
Predicted Return Density |
| Returns |
Tel Aviv 35
Pair trading matchups for Tel Aviv
Emilia Devel
Pair trading matchups for Emilia Devel
Pair Trading with Tel Aviv and Emilia Devel
The main advantage of trading using opposite Tel Aviv and Emilia Devel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tel Aviv position performs unexpectedly, Emilia Devel 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 Emilia Devel will offset losses from the drop in Emilia Devel'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 |
| Emilia Devel vs. IBI Inv House | Emilia Devel vs. The Phoenix Holdings | Emilia Devel vs. Eldav L | Emilia Devel vs. Cohen Dev |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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