Correlation Between Mizrahi Tefahot and Queenco L

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

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

Diversification Opportunities for Mizrahi Tefahot and Queenco L

0.61

Correlation Coefficient

Mizrahi Tefahot  Queenco L

Poor diversification

The 3 months correlation between Mizrahi and Queenco is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Mizrahi Tefahot and Queenco L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queenco L 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 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 Mizrahi Tefahot i.e., Mizrahi Tefahot and Queenco L go up and down completely randomly.

Pair Corralation between Mizrahi Tefahot and Queenco L

Assuming the 90 days trading horizon Mizrahi Tefahot is expected to generate 10.25 times less return on investment than Queenco L. But when comparing it to its historical volatility, Mizrahi Tefahot is 3.75 times less risky than Queenco L. It trades about 0.11 of its potential returns per unit of risk. Queenco L is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  37,188  in Queenco L on September 28, 2024 and sell it today you would earn a total of  37,302  from holding Queenco L or generate 100.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.87%
Values	Daily Returns

Mizrahi Tefahot  vs.  Queenco L

Mizrahi Tefahot

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mizrahi Tefahot are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mizrahi Tefahot may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Queenco L

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Queenco L are ranked lower than 24 (%) 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 Mizrahi Tefahot and Queenco L

The main advantage of trading using opposite Mizrahi Tefahot and Queenco L positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizrahi Tefahot 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 Mizrahi Tefahot 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.