Correlation Between Rotshtein and Israel Canada

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

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

Diversification Opportunities for Rotshtein and Israel Canada

0.89

Correlation Coefficient

Rotshtein  Israel Canada

Very poor diversification

The 3 months correlation between Rotshtein and Israel is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Rotshtein and Israel Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Canada and Rotshtein 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 Rotshtein are associated (or correlated) with Israel Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Canada has no effect on the direction of Rotshtein i.e., Rotshtein and Israel Canada go up and down completely randomly.

Pair Corralation between Rotshtein and Israel Canada

Assuming the 90 days trading horizon Rotshtein is expected to generate 1.15 times more return on investment than Israel Canada. However, Rotshtein is 1.15 times more volatile than Israel Canada. It trades about 0.29 of its potential returns per unit of risk. Israel Canada is currently generating about 0.08 per unit of risk. If you would invest  451,502  in Rotshtein on September 28, 2024 and sell it today you would earn a total of  147,298  from holding Rotshtein or generate 32.62% return on investment over 90 days.

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

Rotshtein  vs.  Israel Canada

Rotshtein

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rotshtein are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Rotshtein sustained solid returns over the last few months and may actually be approaching a breakup point.

Israel Canada

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Israel Canada are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Israel Canada may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Rotshtein and Israel Canada

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

The idea behind Rotshtein and Israel Canada 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..