Correlation Between IBI Mutual and Amot Investments

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

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

Diversification Opportunities for IBI Mutual and Amot Investments

0.66

Correlation Coefficient

IBI Mutual  Amot Investments

Poor diversification

The 3 months correlation between IBI and Amot is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding IBI Mutual Funds and Amot Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amot Investments and IBI Mutual 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 IBI Mutual Funds are associated (or correlated) with Amot Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amot Investments has no effect on the direction of IBI Mutual i.e., IBI Mutual and Amot Investments go up and down completely randomly.

Pair Corralation between IBI Mutual and Amot Investments

Assuming the 90 days trading horizon IBI Mutual is expected to generate 1.03 times less return on investment than Amot Investments. In addition to that, IBI Mutual is 1.56 times more volatile than Amot Investments. It trades about 0.2 of its total potential returns per unit of risk. Amot Investments is currently generating about 0.32 per unit of volatility. If you would invest  159,163  in Amot Investments on September 5, 2024 and sell it today you would earn a total of  44,937  from holding Amot Investments or generate 28.23% return on investment over 90 days.

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

IBI Mutual Funds  vs.  Amot Investments

IBI Mutual Funds

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IBI Mutual Funds are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, IBI Mutual sustained solid returns over the last few months and may actually be approaching a breakup point.

Amot Investments

Risk-Adjusted Performance

25 of 100

Solid

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

Pair Trading with IBI Mutual and Amot Investments

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

The idea behind IBI Mutual Funds and Amot 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .