Correlation Between Israel Discount and Bank Central
Can any of the company-specific risk be diversified away by investing in both Israel Discount and Bank Central 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 Discount and Bank Central into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Discount Bank and Bank Central Asia, you can compare the effects of market volatilities on Israel Discount and Bank Central 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 Discount with a short position of Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Bank Central.
Diversification Opportunities for Israel Discount and Bank Central
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Israel and Bank is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia and Israel Discount 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 Discount Bank are associated (or correlated) with Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of Israel Discount i.e., Israel Discount and Bank Central go up and down completely randomly.
Pair Corralation between Israel Discount and Bank Central
Assuming the 90 days horizon Israel Discount Bank is expected to generate 2.15 times more return on investment than Bank Central. However, Israel Discount is 2.15 times more volatile than Bank Central Asia. It trades about 0.08 of its potential returns per unit of risk. Bank Central Asia is currently generating about 0.08 per unit of risk. If you would invest 4,055 in Israel Discount Bank on July 22, 2024 and sell it today you would earn a total of 1,925 from holding Israel Discount Bank or generate 47.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 75.81% |
Values | Daily Returns |
Israel Discount Bank vs. Bank Central Asia
Performance |
Timeline |
Israel Discount Bank |
Bank Central Asia |
Israel Discount and Bank Central Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Israel Discount and Bank Central
The main advantage of trading using opposite Israel Discount and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, Bank Central 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 Bank Central will offset losses from the drop in Bank Central's long position.Israel Discount vs. Nedbank Group | Israel Discount vs. KBC Groep NV | Israel Discount vs. Bank Mandiri Persero | Israel Discount vs. Eurobank Ergasias Services |
Bank Central vs. Nedbank Group | Bank Central vs. KBC Groep NV | Bank Central vs. Bank Mandiri Persero | Bank Central vs. Eurobank Ergasias Services |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Commodity Directory Find actively traded commodities issued by global exchanges |