Correlation Between Mivtach Shamir and Isras Investment

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

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

Diversification Opportunities for Mivtach Shamir and Isras Investment

0.71

Correlation Coefficient

Mivtach Shamir  Isras Investment

Poor diversification

The 3 months correlation between Mivtach and Isras is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mivtach Shamir and Isras Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isras Investment and Mivtach Shamir 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 Mivtach Shamir are associated (or correlated) with Isras Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isras Investment has no effect on the direction of Mivtach Shamir i.e., Mivtach Shamir and Isras Investment go up and down completely randomly.

Pair Corralation between Mivtach Shamir and Isras Investment

Assuming the 90 days trading horizon Mivtach Shamir is expected to generate 1.38 times less return on investment than Isras Investment. In addition to that, Mivtach Shamir is 1.12 times more volatile than Isras Investment. It trades about 0.16 of its total potential returns per unit of risk. Isras Investment is currently generating about 0.25 per unit of volatility. If you would invest  7,205,543  in Isras Investment on September 26, 2024 and sell it today you would earn a total of  1,581,457  from holding Isras Investment or generate 21.95% return on investment over 90 days.

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

Mivtach Shamir  vs.  Isras Investment

Mivtach Shamir

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mivtach Shamir are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mivtach Shamir sustained solid returns over the last few months and may actually be approaching a breakup point.

Isras Investment

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Isras Investment are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Isras Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mivtach Shamir and Isras Investment

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

The idea behind Mivtach Shamir and Isras Investment 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.