Correlation Between Teuza A and Itay Financial
Can any of the company-specific risk be diversified away by investing in both Teuza A and Itay Financial 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 Teuza A and Itay Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teuza A Fairchild and Itay Financial AA, you can compare the effects of market volatilities on Teuza A and Itay Financial 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 Teuza A with a short position of Itay Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teuza A and Itay Financial.
Diversification Opportunities for Teuza A and Itay Financial
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Teuza and Itay is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Teuza A Fairchild and Itay Financial AA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itay Financial AA and Teuza A 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 Teuza A Fairchild are associated (or correlated) with Itay Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itay Financial AA has no effect on the direction of Teuza A i.e., Teuza A and Itay Financial go up and down completely randomly.
Pair Corralation between Teuza A and Itay Financial
Assuming the 90 days trading horizon Teuza A is expected to generate 2.79 times less return on investment than Itay Financial. But when comparing it to its historical volatility, Teuza A Fairchild is 2.01 times less risky than Itay Financial. It trades about 0.02 of its potential returns per unit of risk. Itay Financial AA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 33,060 in Itay Financial AA on September 3, 2024 and sell it today you would lose (640.00) from holding Itay Financial AA or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teuza A Fairchild vs. Itay Financial AA
Performance |
| Timeline |
| Teuza A Fairchild |
| Itay Financial AA |
Teuza A and Itay Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teuza A and Itay Financial
The main advantage of trading using opposite Teuza A and Itay Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teuza A position performs unexpectedly, Itay Financial 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 Itay Financial will offset losses from the drop in Itay Financial's long position.| Teuza A vs. Bank Hapoalim | Teuza A vs. Israel Discount Bank | Teuza A vs. First International Bank | Teuza A vs. Elbit Systems |
| Itay Financial vs. Direct Capital Investments | Itay Financial vs. Brainsway | Itay Financial vs. Mivne Real Estate | Itay Financial vs. Photomyne |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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