Correlation Between Israel Discount and Brack Capit

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

By analyzing existing cross correlation between Israel Discount Bank and Brack Capit N, you can compare the effects of market volatilities on Israel Discount and Brack Capit 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 Israel Discount with a short position of Brack Capit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Brack Capit.

Diversification Opportunities for Israel Discount and Brack Capit

-0.35

Correlation Coefficient

Israel Discount  Brack Capit

Very good diversification

The 3 months correlation between Israel and Brack is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and Brack Capit N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brack Capit N and Israel Discount 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 Israel Discount Bank are associated (or correlated) with Brack Capit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brack Capit N has no effect on the direction of Israel Discount i.e., Israel Discount and Brack Capit go up and down completely randomly.

Pair Corralation between Israel Discount and Brack Capit

Assuming the 90 days trading horizon Israel Discount Bank is expected to generate 0.47 times more return on investment than Brack Capit. However, Israel Discount Bank is 2.14 times less risky than Brack Capit. It trades about 0.07 of its potential returns per unit of risk. Brack Capit N is currently generating about -0.01 per unit of risk. If you would invest  171,201  in Israel Discount Bank on September 30, 2024 and sell it today you would earn a total of  70,599  from holding Israel Discount Bank or generate 41.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Israel Discount Bank  vs.  Brack Capit N

Israel Discount Bank

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Israel Discount Bank are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Israel Discount sustained solid returns over the last few months and may actually be approaching a breakup point.

Brack Capit N

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brack Capit N has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Israel Discount and Brack Capit

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

The idea behind Israel Discount Bank and Brack Capit N 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.