Correlation Between GODM Investments and Meitav Dash

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

Diversification Opportunities for GODM Investments and Meitav Dash

0.93

Correlation Coefficient

GODM Investments  Meitav Dash

Almost no diversification

The 3 months correlation between GODM and Meitav is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding GODM Investments and Meitav Dash Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meitav Dash Investments 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 Dash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meitav Dash Investments has no effect on the direction of GODM Investments i.e., GODM Investments and Meitav Dash go up and down completely randomly.

Pair Corralation between GODM Investments and Meitav Dash

Assuming the 90 days trading horizon GODM Investments is expected to generate 5.32 times more return on investment than Meitav Dash. However, GODM Investments is 5.32 times more volatile than Meitav Dash Investments. It trades about 0.21 of its potential returns per unit of risk. Meitav Dash Investments is currently generating about 0.33 per unit of risk. If you would invest  2,900  in GODM Investments on December 30, 2024 and sell it today you would earn a total of  5,410  from holding GODM Investments or generate 186.55% return on investment over 90 days.

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

GODM Investments  vs.  Meitav Dash Investments

GODM Investments

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GODM Investments are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GODM Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

Meitav Dash Investments

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Meitav Dash Investments are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Meitav Dash sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GODM Investments and Meitav Dash

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

The idea behind GODM Investments and Meitav Dash Investments 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.