Correlation Between Gold Bond and Isras Investment

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

By analyzing existing cross correlation between The Gold Bond and Isras Investment, you can compare the effects of market volatilities on Gold Bond and Isras Investment 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 Gold Bond with a short position of Isras Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bond and Isras Investment.

Diversification Opportunities for Gold Bond and Isras Investment

-0.21

Correlation Coefficient

Gold Bond  Isras Investment

Very good diversification

The 3 months correlation between Gold and Isras is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding The Gold Bond and Isras Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isras Investment and Gold Bond 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 The Gold Bond are associated (or correlated) with Isras Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isras Investment has no effect on the direction of Gold Bond i.e., Gold Bond and Isras Investment go up and down completely randomly.

Pair Corralation between Gold Bond and Isras Investment

Assuming the 90 days trading horizon The Gold Bond is expected to generate 1.27 times more return on investment than Isras Investment. However, Gold Bond is 1.27 times more volatile than Isras Investment. It trades about 0.06 of its potential returns per unit of risk. Isras Investment is currently generating about -0.07 per unit of risk. If you would invest  1,680,608  in The Gold Bond on December 30, 2024 and sell it today you would earn a total of  88,392  from holding The Gold Bond or generate 5.26% return on investment over 90 days.

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

The Gold Bond  vs.  Isras Investment

Gold Bond

Risk-Adjusted Performance

Insignificant

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

Isras Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Isras Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Gold Bond and Isras Investment

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

The idea behind The Gold Bond and Isras Investment 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..