Correlation Between Israel China and Bladeranger

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

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

Diversification Opportunities for Israel China and Bladeranger

0.52

Correlation Coefficient

Israel China  Bladeranger

Very weak diversification

The 3 months correlation between Israel and Bladeranger is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and Bladeranger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bladeranger and Israel China 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 Israel China Biotechnology are associated (or correlated) with Bladeranger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bladeranger has no effect on the direction of Israel China i.e., Israel China and Bladeranger go up and down completely randomly.

Pair Corralation between Israel China and Bladeranger

Assuming the 90 days trading horizon Israel China Biotechnology is expected to under-perform the Bladeranger. But the stock apears to be less risky and, when comparing its historical volatility, Israel China Biotechnology is 1.28 times less risky than Bladeranger. The stock trades about -0.01 of its potential returns per unit of risk. The Bladeranger is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  56.00  in Bladeranger on September 12, 2024 and sell it today you would earn a total of  3.00  from holding Bladeranger or generate 5.36% return on investment over 90 days.

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

Israel China Biotechnology  vs.  Bladeranger

Israel China Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Israel China Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Israel China is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bladeranger

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bladeranger are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bladeranger sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Israel China and Bladeranger

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

The idea behind Israel China Biotechnology and Bladeranger 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.