Correlation Between Victory Supermarket and Israel Discount
Can any of the company-specific risk be diversified away by investing in both Victory Supermarket and Israel Discount 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 Victory Supermarket and Israel Discount into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Supermarket Chain and Israel Discount Bank, you can compare the effects of market volatilities on Victory Supermarket and Israel Discount 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 Victory Supermarket with a short position of Israel Discount. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Supermarket and Israel Discount.
Diversification Opportunities for Victory Supermarket and Israel Discount
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Victory and Israel is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Victory Supermarket Chain and Israel Discount Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Discount Bank and Victory Supermarket 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 Victory Supermarket Chain are associated (or correlated) with Israel Discount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Discount Bank has no effect on the direction of Victory Supermarket i.e., Victory Supermarket and Israel Discount go up and down completely randomly.
Pair Corralation between Victory Supermarket and Israel Discount
Assuming the 90 days trading horizon Victory Supermarket Chain is expected to under-perform the Israel Discount. But the stock apears to be less risky and, when comparing its historical volatility, Victory Supermarket Chain is 1.04 times less risky than Israel Discount. The stock trades about -0.19 of its potential returns per unit of risk. The Israel Discount Bank is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 248,000 in Israel Discount Bank on October 23, 2024 and sell it today you would earn a total of 19,700 from holding Israel Discount Bank or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory Supermarket Chain vs. Israel Discount Bank
Performance |
| Timeline |
| Victory Supermarket Chain |
| Israel Discount Bank |
Victory Supermarket and Israel Discount Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Supermarket and Israel Discount
The main advantage of trading using opposite Victory Supermarket and Israel Discount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Supermarket position performs unexpectedly, Israel Discount 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 Israel Discount will offset losses from the drop in Israel Discount's long position.| Victory Supermarket vs. Shufersal | Victory Supermarket vs. Rami Levi | Victory Supermarket vs. Tiv Taam | Victory Supermarket vs. M Yochananof and |
| Israel Discount vs. Bank Leumi Le Israel | Israel Discount vs. Bank Hapoalim | Israel Discount vs. Mizrahi Tefahot | Israel Discount vs. Bezeq Israeli Telecommunication |
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 Stocks Directory module to find actively traded stocks across global markets.
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