Correlation Between Industrial Tech and Israel Acquisitions

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

By analyzing existing cross correlation between Industrial Tech Acquisitions and Israel Acquisitions Corp, you can compare the effects of market volatilities on Industrial Tech and Israel Acquisitions 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 Industrial Tech with a short position of Israel Acquisitions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Tech and Israel Acquisitions.

Diversification Opportunities for Industrial Tech and Israel Acquisitions

0.57

Correlation Coefficient

Industrial Tech  Israel Acquisitions

Very weak diversification

The 3 months correlation between Industrial and Israel is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Tech Acquisitions and Israel Acquisitions Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Acquisitions Corp and Industrial Tech 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 Industrial Tech Acquisitions are associated (or correlated) with Israel Acquisitions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Acquisitions Corp has no effect on the direction of Industrial Tech i.e., Industrial Tech and Israel Acquisitions go up and down completely randomly.

Pair Corralation between Industrial Tech and Israel Acquisitions

If you would invest  1,120  in Israel Acquisitions Corp on September 28, 2024 and sell it today you would earn a total of  12.00  from holding Israel Acquisitions Corp or generate 1.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Industrial Tech Acquisitions  vs.  Israel Acquisitions Corp

Industrial Tech Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Industrial Tech Acquisitions has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Industrial Tech is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Israel Acquisitions Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Israel Acquisitions Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Israel Acquisitions is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Industrial Tech and Israel Acquisitions

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

The idea behind Industrial Tech Acquisitions and Israel Acquisitions Corp 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.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.