Correlation Between Menif Financial and Israel China

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

By analyzing existing cross correlation between Menif Financial Services and Israel China Biotechnology, you can compare the effects of market volatilities on Menif Financial and Israel China 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 Menif Financial with a short position of Israel China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Menif Financial and Israel China.

Diversification Opportunities for Menif Financial and Israel China

-0.46

Correlation Coefficient

Menif Financial  Israel China

Very good diversification

The 3 months correlation between Menif and Israel is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Menif Financial Services and Israel China Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel China Biotech and Menif Financial 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 Menif Financial Services are associated (or correlated) with Israel China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel China Biotech has no effect on the direction of Menif Financial i.e., Menif Financial and Israel China go up and down completely randomly.

Pair Corralation between Menif Financial and Israel China

Assuming the 90 days trading horizon Menif Financial Services is expected to generate 0.52 times more return on investment than Israel China. However, Menif Financial Services is 1.93 times less risky than Israel China. It trades about 0.14 of its potential returns per unit of risk. Israel China Biotechnology is currently generating about -0.04 per unit of risk. If you would invest  133,014  in Menif Financial Services on September 29, 2024 and sell it today you would earn a total of  19,486  from holding Menif Financial Services or generate 14.65% return on investment over 90 days.

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

Menif Financial Services  vs.  Israel China Biotechnology

Menif Financial Services

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Menif Financial Services are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Menif Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Israel China Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Israel China Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers 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 Menif Financial and Israel China

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

The idea behind Menif Financial Services and Israel China Biotechnology 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.