Correlation Between Mivtach Shamir and Meitav Dash
Can any of the company-specific risk be diversified away by investing in both Mivtach Shamir and Meitav Dash 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 Mivtach Shamir and Meitav Dash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mivtach Shamir and Meitav Dash Investments, you can compare the effects of market volatilities on Mivtach Shamir and Meitav Dash 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 Mivtach Shamir with a short position of Meitav Dash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mivtach Shamir and Meitav Dash.
Diversification Opportunities for Mivtach Shamir and Meitav Dash
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mivtach and Meitav is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mivtach Shamir and Meitav Dash Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meitav Dash Investments and Mivtach Shamir 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 Mivtach Shamir are associated (or correlated) with Meitav Dash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meitav Dash Investments has no effect on the direction of Mivtach Shamir i.e., Mivtach Shamir and Meitav Dash go up and down completely randomly.
Pair Corralation between Mivtach Shamir and Meitav Dash
Assuming the 90 days trading horizon Mivtach Shamir is expected to generate 1.52 times more return on investment than Meitav Dash. However, Mivtach Shamir is 1.52 times more volatile than Meitav Dash Investments. It trades about 0.15 of its potential returns per unit of risk. Meitav Dash Investments is currently generating about 0.15 per unit of risk. If you would invest 845,299 in Mivtach Shamir on February 15, 2024 and sell it today you would earn a total of 504,701 from holding Mivtach Shamir or generate 59.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Mivtach Shamir vs. Meitav Dash Investments
Performance |
Timeline |
Mivtach Shamir |
Meitav Dash Investments |
Mivtach Shamir and Meitav Dash Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mivtach Shamir and Meitav Dash
The main advantage of trading using opposite Mivtach Shamir and Meitav Dash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mivtach Shamir position performs unexpectedly, Meitav Dash 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 Meitav Dash will offset losses from the drop in Meitav Dash's long position.The idea behind Mivtach Shamir and Meitav Dash Investments 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..
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