Correlation Between Partners Bank and Israel Discount
Can any of the company-specific risk be diversified away by investing in both Partners Bank and Israel Discount 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 Partners Bank and Israel Discount into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Partners Bank of and Israel Discount Bank, you can compare the effects of market volatilities on Partners Bank and Israel Discount 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 Partners Bank with a short position of Israel Discount. Check out your portfolio center. Please also check ongoing floating volatility patterns of Partners Bank and Israel Discount.
Diversification Opportunities for Partners Bank and Israel Discount
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Partners and Israel is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Partners Bank of and Israel Discount Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Discount Bank and Partners Bank 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 Partners Bank of are associated (or correlated) with Israel Discount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Discount Bank has no effect on the direction of Partners Bank i.e., Partners Bank and Israel Discount go up and down completely randomly.
Pair Corralation between Partners Bank and Israel Discount
Given the investment horizon of 90 days Partners Bank of is expected to under-perform the Israel Discount. But the pink sheet apears to be less risky and, when comparing its historical volatility, Partners Bank of is 5.54 times less risky than Israel Discount. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Israel Discount Bank is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,266 in Israel Discount Bank on February 22, 2024 and sell it today you would lose (466.00) from holding Israel Discount Bank or give up 8.85% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Partners Bank of vs. Israel Discount Bank
Performance |
Timeline |
Partners Bank |
Israel Discount Bank |
Partners Bank and Israel Discount Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Partners Bank and Israel Discount
The main advantage of trading using opposite Partners Bank and Israel Discount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Partners Bank position performs unexpectedly, Israel Discount 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 Discount will offset losses from the drop in Israel Discount's long position.Partners Bank vs. First Ottawa Bancshares | Partners Bank vs. Coastal Carolina Bancshares | Partners Bank vs. First Bankers Trustshares | Partners Bank vs. North Dallas Bank |
Israel Discount vs. First Ottawa Bancshares | Israel Discount vs. Coastal Carolina Bancshares | Israel Discount vs. First Bankers Trustshares | Israel Discount vs. North Dallas 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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