Correlation Between Global Knafaim and MEITAV INVESTMENTS

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

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

Diversification Opportunities for Global Knafaim and MEITAV INVESTMENTS

0.69

Correlation Coefficient

Global Knafaim  MEITAV INVESTMENTS

Poor diversification

The 3 months correlation between Global and MEITAV is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Global Knafaim Leasing and MEITAV INVESTMENTS HOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEITAV INVESTMENTS HOUSE and Global Knafaim 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 Global Knafaim Leasing are associated (or correlated) with MEITAV INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEITAV INVESTMENTS HOUSE has no effect on the direction of Global Knafaim i.e., Global Knafaim and MEITAV INVESTMENTS go up and down completely randomly.

Pair Corralation between Global Knafaim and MEITAV INVESTMENTS

Assuming the 90 days trading horizon Global Knafaim is expected to generate 1.77 times less return on investment than MEITAV INVESTMENTS. In addition to that, Global Knafaim is 1.18 times more volatile than MEITAV INVESTMENTS HOUSE. It trades about 0.22 of its total potential returns per unit of risk. MEITAV INVESTMENTS HOUSE is currently generating about 0.45 per unit of volatility. If you would invest  192,473  in MEITAV INVESTMENTS HOUSE on September 25, 2024 and sell it today you would earn a total of  112,027  from holding MEITAV INVESTMENTS HOUSE or generate 58.2% return on investment over 90 days.

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

Global Knafaim Leasing  vs.  MEITAV INVESTMENTS HOUSE

Global Knafaim Leasing

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global Knafaim Leasing are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Global Knafaim sustained solid returns over the last few months and may actually be approaching a breakup point.

MEITAV INVESTMENTS HOUSE

Risk-Adjusted Performance

35 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in MEITAV INVESTMENTS HOUSE are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MEITAV INVESTMENTS sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Knafaim and MEITAV INVESTMENTS

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

The idea behind Global Knafaim Leasing and MEITAV INVESTMENTS HOUSE 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.