Correlation Between Israel Discount and Strauss

Can any of the company-specific risk be diversified away by investing in both Israel Discount and Strauss 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 Strauss 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 Strauss Group, you can compare the effects of market volatilities on Israel Discount and Strauss 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 Strauss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Strauss.

Diversification Opportunities for Israel Discount and Strauss

0.31

Correlation Coefficient

Israel Discount  Strauss

Weak diversification

The 3 months correlation between Israel and Strauss is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and Strauss Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strauss Group 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 Strauss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strauss Group has no effect on the direction of Israel Discount i.e., Israel Discount and Strauss go up and down completely randomly.

Pair Corralation between Israel Discount and Strauss

Assuming the 90 days trading horizon Israel Discount is expected to generate 2.84 times less return on investment than Strauss. In addition to that, Israel Discount is 1.09 times more volatile than Strauss Group. It trades about 0.06 of its total potential returns per unit of risk. Strauss Group is currently generating about 0.18 per unit of volatility. If you would invest  674,585  in Strauss Group on December 31, 2024 and sell it today you would earn a total of  105,415  from holding Strauss Group or generate 15.63% return on investment over 90 days.

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

Israel Discount Bank  vs.  Strauss Group

Israel Discount Bank

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Israel Discount Bank are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Israel Discount may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Strauss Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Strauss Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Strauss sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Israel Discount and Strauss

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

The idea behind Israel Discount Bank and Strauss Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.