Correlation Between Tel Aviv and Isracard
Can any of the company-specific risk be diversified away by investing in both Tel Aviv and Isracard 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 Isracard 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 Isracard, you can compare the effects of market volatilities on Tel Aviv and Isracard 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 Isracard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tel Aviv and Isracard.
Diversification Opportunities for Tel Aviv and Isracard
Very poor diversification
The 3 months correlation between Tel and Isracard is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Tel Aviv 35 and Isracard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isracard 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 Isracard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isracard has no effect on the direction of Tel Aviv i.e., Tel Aviv and Isracard go up and down completely randomly.
Pair Corralation between Tel Aviv and Isracard
Assuming the 90 days trading horizon Tel Aviv 35 is expected to generate 0.69 times more return on investment than Isracard. However, Tel Aviv 35 is 1.44 times less risky than Isracard. It trades about 0.4 of its potential returns per unit of risk. Isracard is currently generating about -0.03 per unit of risk. If you would invest 217,424 in Tel Aviv 35 on August 29, 2024 and sell it today you would earn a total of 12,915 from holding Tel Aviv 35 or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tel Aviv 35 vs. Isracard
Performance |
| Timeline |
Tel Aviv and Isracard Volatility Contrast
Predicted Return Density |
| Returns |
Tel Aviv 35
Pair trading matchups for Tel Aviv
Isracard
Pair trading matchups for Isracard
Pair Trading with Tel Aviv and Isracard
The main advantage of trading using opposite Tel Aviv and Isracard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tel Aviv position performs unexpectedly, Isracard 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 Isracard will offset losses from the drop in Isracard's long position.| Tel Aviv vs. Azorim Investment Development | Tel Aviv vs. Shagrir Group Vehicle | Tel Aviv vs. Sure Tech Investments LP | Tel Aviv vs. Retailors |
| Isracard vs. Bank Hapoalim | Isracard vs. Bank Leumi Le Israel | Isracard vs. Mizrahi Tefahot | Isracard vs. Israel Discount Bank |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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