Correlation Between Mordechai Aviv and Knafaim

Can any of the company-specific risk be diversified away by investing in both Mordechai Aviv and Knafaim 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 Mordechai Aviv and Knafaim into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mordechai Aviv Taasiot and Knafaim, you can compare the effects of market volatilities on Mordechai Aviv and Knafaim 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 Mordechai Aviv with a short position of Knafaim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mordechai Aviv and Knafaim.

Diversification Opportunities for Mordechai Aviv and Knafaim

0.76

Correlation Coefficient

Mordechai Aviv  Knafaim

Poor diversification

The 3 months correlation between Mordechai and Knafaim is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mordechai Aviv Taasiot and Knafaim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knafaim and Mordechai 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 Mordechai Aviv Taasiot are associated (or correlated) with Knafaim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knafaim has no effect on the direction of Mordechai Aviv i.e., Mordechai Aviv and Knafaim go up and down completely randomly.

Pair Corralation between Mordechai Aviv and Knafaim

Assuming the 90 days trading horizon Mordechai Aviv Taasiot is expected to generate 1.29 times more return on investment than Knafaim. However, Mordechai Aviv is 1.29 times more volatile than Knafaim. It trades about 0.27 of its potential returns per unit of risk. Knafaim is currently generating about 0.26 per unit of risk. If you would invest  146,700  in Mordechai Aviv Taasiot on September 14, 2024 and sell it today you would earn a total of  63,000  from holding Mordechai Aviv Taasiot or generate 42.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.87%
Values	Daily Returns

Mordechai Aviv Taasiot  vs.  Knafaim

Mordechai Aviv Taasiot

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mordechai Aviv Taasiot are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mordechai Aviv sustained solid returns over the last few months and may actually be approaching a breakup point.

Knafaim

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Knafaim are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Knafaim sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mordechai Aviv and Knafaim

The main advantage of trading using opposite Mordechai Aviv and Knafaim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mordechai Aviv position performs unexpectedly, Knafaim 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 Knafaim will offset losses from the drop in Knafaim's long position.

The idea behind Mordechai Aviv Taasiot and Knafaim pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.