Correlation Between GODM Investments and MEITAV INVESTMENTS

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

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

Diversification Opportunities for GODM Investments and MEITAV INVESTMENTS

-0.9

Correlation Coefficient

GODM Investments  MEITAV INVESTMENTS

Pay attention - limited upside

The 3 months correlation between GODM and MEITAV is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding GODM Investments and MEITAV INVESTMENTS HOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEITAV INVESTMENTS HOUSE and GODM Investments 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 GODM Investments are associated (or correlated) with MEITAV INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEITAV INVESTMENTS HOUSE has no effect on the direction of GODM Investments i.e., GODM Investments and MEITAV INVESTMENTS go up and down completely randomly.

Pair Corralation between GODM Investments and MEITAV INVESTMENTS

Assuming the 90 days trading horizon GODM Investments is expected to under-perform the MEITAV INVESTMENTS. In addition to that, GODM Investments is 1.32 times more volatile than MEITAV INVESTMENTS HOUSE. It trades about -0.16 of its total potential returns per unit of risk. MEITAV INVESTMENTS HOUSE is currently generating about 0.38 per unit of volatility. If you would invest  189,236  in MEITAV INVESTMENTS HOUSE on September 12, 2024 and sell it today you would earn a total of  100,664  from holding MEITAV INVESTMENTS HOUSE or generate 53.19% return on investment over 90 days.

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

GODM Investments  vs.  MEITAV INVESTMENTS HOUSE

GODM Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GODM Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MEITAV INVESTMENTS HOUSE

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in MEITAV INVESTMENTS HOUSE are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MEITAV INVESTMENTS sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GODM Investments and MEITAV INVESTMENTS

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

The idea behind GODM Investments and MEITAV INVESTMENTS HOUSE 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.