Correlation Between Isracard and Unitronics

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

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

Diversification Opportunities for Isracard and Unitronics

-0.6

Correlation Coefficient

Isracard  Unitronics

Excellent diversification

The 3 months correlation between Isracard and Unitronics is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Isracard and Unitronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unitronics and Isracard 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 Isracard are associated (or correlated) with Unitronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unitronics has no effect on the direction of Isracard i.e., Isracard and Unitronics go up and down completely randomly.

Pair Corralation between Isracard and Unitronics

Assuming the 90 days trading horizon Isracard is expected to generate 1.17 times more return on investment than Unitronics. However, Isracard is 1.17 times more volatile than Unitronics. It trades about 0.11 of its potential returns per unit of risk. Unitronics is currently generating about -0.05 per unit of risk. If you would invest  123,569  in Isracard on May 1, 2025 and sell it today you would earn a total of  15,431  from holding Isracard or generate 12.49% return on investment over 90 days.

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

Isracard  vs.  Unitronics

Isracard

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Isracard are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Isracard sustained solid returns over the last few months and may actually be approaching a breakup point.

Unitronics

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Isracard and Unitronics

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

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