Correlation Between Discount Investment and Tadir Gan

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

By analyzing existing cross correlation between Discount Investment Corp and Tadir Gan 1993, you can compare the effects of market volatilities on Discount Investment and Tadir Gan 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 Discount Investment with a short position of Tadir Gan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discount Investment and Tadir Gan.

Diversification Opportunities for Discount Investment and Tadir Gan

-0.36

Correlation Coefficient

Discount Investment  Tadir Gan

Very good diversification

The 3 months correlation between Discount and Tadir is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Discount Investment Corp and Tadir Gan 1993 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tadir Gan 1993 and Discount Investment 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 Discount Investment Corp are associated (or correlated) with Tadir Gan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tadir Gan 1993 has no effect on the direction of Discount Investment i.e., Discount Investment and Tadir Gan go up and down completely randomly.

Pair Corralation between Discount Investment and Tadir Gan

Assuming the 90 days trading horizon Discount Investment Corp is expected to generate 0.68 times more return on investment than Tadir Gan. However, Discount Investment Corp is 1.47 times less risky than Tadir Gan. It trades about 0.31 of its potential returns per unit of risk. Tadir Gan 1993 is currently generating about 0.02 per unit of risk. If you would invest  32,630  in Discount Investment Corp on September 13, 2024 and sell it today you would earn a total of  13,930  from holding Discount Investment Corp or generate 42.69% return on investment over 90 days.

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

Discount Investment Corp  vs.  Tadir Gan 1993

Discount Investment Corp

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Discount Investment Corp are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Discount Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

Tadir Gan 1993

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tadir Gan 1993 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Tadir Gan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Discount Investment and Tadir Gan

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

The idea behind Discount Investment Corp and Tadir Gan 1993 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.