Correlation Between Meitav Trade and Queenco L

Can any of the company-specific risk be diversified away by investing in both Meitav Trade and Queenco L 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 Meitav Trade and Queenco L into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Meitav Trade Inv and Queenco L, you can compare the effects of market volatilities on Meitav Trade and Queenco L 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 Meitav Trade with a short position of Queenco L. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meitav Trade and Queenco L.

Diversification Opportunities for Meitav Trade and Queenco L

0.7

Correlation Coefficient

Meitav Trade  Queenco L

Poor diversification

The 3 months correlation between Meitav and Queenco is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Meitav Trade Inv and Queenco L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queenco L and Meitav Trade 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 Meitav Trade Inv are associated (or correlated) with Queenco L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queenco L has no effect on the direction of Meitav Trade i.e., Meitav Trade and Queenco L go up and down completely randomly.

Pair Corralation between Meitav Trade and Queenco L

Assuming the 90 days trading horizon Meitav Trade Inv is expected to under-perform the Queenco L. But the stock apears to be less risky and, when comparing its historical volatility, Meitav Trade Inv is 4.79 times less risky than Queenco L. The stock trades about -0.08 of its potential returns per unit of risk. The Queenco L is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest  43,460  in Queenco L on September 28, 2024 and sell it today you would earn a total of  31,030  from holding Queenco L or generate 71.4% return on investment over 90 days.

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

Meitav Trade Inv  vs.  Queenco L

Meitav Trade Inv

Risk-Adjusted Performance

33 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Meitav Trade Inv are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Meitav Trade sustained solid returns over the last few months and may actually be approaching a breakup point.

Queenco L

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Queenco L are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Queenco L sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Meitav Trade and Queenco L

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

The idea behind Meitav Trade Inv and Queenco L 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.