Correlation Between Tel Aviv and Holmes Place
Can any of the company-specific risk be diversified away by investing in both Tel Aviv and Holmes Place 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 Holmes Place 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 Holmes Place International, you can compare the effects of market volatilities on Tel Aviv and Holmes Place 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 Holmes Place. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tel Aviv and Holmes Place.
Diversification Opportunities for Tel Aviv and Holmes Place
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tel and Holmes is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Tel Aviv 35 and Holmes Place International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holmes Place Interna 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 Holmes Place. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holmes Place Interna has no effect on the direction of Tel Aviv i.e., Tel Aviv and Holmes Place go up and down completely randomly.
Pair Corralation between Tel Aviv and Holmes Place
Assuming the 90 days trading horizon Tel Aviv is expected to generate 2.77 times less return on investment than Holmes Place. But when comparing it to its historical volatility, Tel Aviv 35 is 3.21 times less risky than Holmes Place. It trades about 0.17 of its potential returns per unit of risk. Holmes Place International is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 52,410 in Holmes Place International on September 1, 2024 and sell it today you would earn a total of 3,560 from holding Holmes Place International or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tel Aviv 35 vs. Holmes Place International
Performance |
| Timeline |
Tel Aviv and Holmes Place Volatility Contrast
Predicted Return Density |
| Returns |
Tel Aviv 35
Pair trading matchups for Tel Aviv
Holmes Place International
Pair trading matchups for Holmes Place
Pair Trading with Tel Aviv and Holmes Place
The main advantage of trading using opposite Tel Aviv and Holmes Place positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tel Aviv position performs unexpectedly, Holmes Place 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 Holmes Place will offset losses from the drop in Holmes Place's long position.| Tel Aviv vs. YH Dimri Construction | Tel Aviv vs. Electreon Wireless | Tel Aviv vs. B Yair Building | Tel Aviv vs. One Software Technologies |
| Holmes Place vs. Fattal 1998 Holdings | Holmes Place vs. Delek Group | Holmes Place vs. Bank Leumi Le Israel | Holmes Place vs. Matrix |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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