Correlation Between Gold Bond and Mizrahi Tefahot

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

Diversification Opportunities for Gold Bond and Mizrahi Tefahot

0.71

Correlation Coefficient

Gold Bond  Mizrahi Tefahot

Poor diversification

The 3 months correlation between Gold and Mizrahi is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding The Gold Bond and Mizrahi Tefahot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mizrahi Tefahot 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 Mizrahi Tefahot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mizrahi Tefahot has no effect on the direction of Gold Bond i.e., Gold Bond and Mizrahi Tefahot go up and down completely randomly.

Pair Corralation between Gold Bond and Mizrahi Tefahot

Assuming the 90 days trading horizon Gold Bond is expected to generate 1.36 times less return on investment than Mizrahi Tefahot. In addition to that, Gold Bond is 1.54 times more volatile than Mizrahi Tefahot. It trades about 0.06 of its total potential returns per unit of risk. Mizrahi Tefahot is currently generating about 0.12 per unit of volatility. If you would invest  1,549,517  in Mizrahi Tefahot on December 30, 2024 and sell it today you would earn a total of  129,483  from holding Mizrahi Tefahot or generate 8.36% return on investment over 90 days.

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

The Gold Bond  vs.  Mizrahi Tefahot

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.

Mizrahi Tefahot

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mizrahi Tefahot are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mizrahi Tefahot may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Gold Bond and Mizrahi Tefahot

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

The idea behind The Gold Bond and Mizrahi Tefahot 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.