Correlation Between Psagot Index and Psagot Index

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

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

Diversification Opportunities for Psagot Index and Psagot Index

0.98

Correlation Coefficient

Psagot Index  Psagot Index

Almost no diversification

The 3 months correlation between Psagot and Psagot is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Psagot Index Funds and Psagot Index Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Psagot Index Funds and Psagot Index 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 Psagot Index Funds are associated (or correlated) with Psagot Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Psagot Index Funds has no effect on the direction of Psagot Index i.e., Psagot Index and Psagot Index go up and down completely randomly.

Pair Corralation between Psagot Index and Psagot Index

Assuming the 90 days trading horizon Psagot Index Funds is expected to generate 1.09 times more return on investment than Psagot Index. However, Psagot Index is 1.09 times more volatile than Psagot Index Funds. It trades about 0.27 of its potential returns per unit of risk. Psagot Index Funds is currently generating about 0.25 per unit of risk. If you would invest  386,871  in Psagot Index Funds on September 6, 2024 and sell it today you would earn a total of  2,927  from holding Psagot Index Funds or generate 0.76% return on investment over 90 days.

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

Psagot Index Funds  vs.  Psagot Index Funds

Psagot Index Funds

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Psagot Index Funds are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Psagot Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Psagot Index Funds

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Psagot Index Funds are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Psagot Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Psagot Index and Psagot Index

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

The idea behind Psagot Index Funds and Psagot Index Funds 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.