Correlation Between Mizrahi Tefahot and B Yair
Can any of the company-specific risk be diversified away by investing in both Mizrahi Tefahot and B Yair 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 Mizrahi Tefahot and B Yair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizrahi Tefahot and B Yair Building, you can compare the effects of market volatilities on Mizrahi Tefahot and B Yair 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 Mizrahi Tefahot with a short position of B Yair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizrahi Tefahot and B Yair.
Diversification Opportunities for Mizrahi Tefahot and B Yair
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mizrahi and BYAR is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mizrahi Tefahot and B Yair Building in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Yair Building and Mizrahi Tefahot 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 Mizrahi Tefahot are associated (or correlated) with B Yair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Yair Building has no effect on the direction of Mizrahi Tefahot i.e., Mizrahi Tefahot and B Yair go up and down completely randomly.
Pair Corralation between Mizrahi Tefahot and B Yair
Assuming the 90 days trading horizon Mizrahi Tefahot is expected to generate 4.06 times less return on investment than B Yair. But when comparing it to its historical volatility, Mizrahi Tefahot is 3.63 times less risky than B Yair. It trades about 0.24 of its potential returns per unit of risk. B Yair Building is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 91,990 in B Yair Building on September 25, 2024 and sell it today you would earn a total of 65,310 from holding B Yair Building or generate 71.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mizrahi Tefahot vs. B Yair Building
Performance |
Timeline |
Mizrahi Tefahot |
B Yair Building |
Mizrahi Tefahot and B Yair Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mizrahi Tefahot and B Yair
The main advantage of trading using opposite Mizrahi Tefahot and B Yair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizrahi Tefahot position performs unexpectedly, B Yair 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 B Yair will offset losses from the drop in B Yair's long position.Mizrahi Tefahot vs. Bank Leumi Le Israel | Mizrahi Tefahot vs. Bank Hapoalim | Mizrahi Tefahot vs. Israel Discount Bank | Mizrahi Tefahot vs. First International Bank |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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