Correlation Between Tel Aviv and Automatic Bank
Can any of the company-specific risk be diversified away by investing in both Tel Aviv and Automatic Bank 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 Automatic Bank 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 Automatic Bank Services, you can compare the effects of market volatilities on Tel Aviv and Automatic Bank 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 Automatic Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tel Aviv and Automatic Bank.
Diversification Opportunities for Tel Aviv and Automatic Bank
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tel and Automatic is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Tel Aviv 35 and Automatic Bank Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Bank Services 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 Automatic Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Bank Services has no effect on the direction of Tel Aviv i.e., Tel Aviv and Automatic Bank go up and down completely randomly.
Pair Corralation between Tel Aviv and Automatic Bank
Assuming the 90 days trading horizon Tel Aviv is expected to generate 3.4 times less return on investment than Automatic Bank. But when comparing it to its historical volatility, Tel Aviv 35 is 2.68 times less risky than Automatic Bank. It trades about 0.32 of its potential returns per unit of risk. Automatic Bank Services is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 155,500 in Automatic Bank Services on August 28, 2024 and sell it today you would earn a total of 48,400 from holding Automatic Bank Services or generate 31.13% 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. Automatic Bank Services
Performance |
| Timeline |
Tel Aviv and Automatic Bank Volatility Contrast
Predicted Return Density |
| Returns |
Tel Aviv 35
Pair trading matchups for Tel Aviv
Automatic Bank Services
Pair trading matchups for Automatic Bank
Pair Trading with Tel Aviv and Automatic Bank
The main advantage of trading using opposite Tel Aviv and Automatic Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tel Aviv position performs unexpectedly, Automatic Bank 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 Automatic Bank will offset losses from the drop in Automatic Bank'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 |
| Automatic Bank vs. Unitronics | Automatic Bank vs. PCB Tec | Automatic Bank vs. Tower Semiconductor | Automatic Bank vs. Priortech |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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