Correlation Between Israel China and Feat Fund

Can any of the company-specific risk be diversified away by investing in both Israel China and Feat Fund 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 Israel China and Feat Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Israel China Biotechnology and Feat Fund Investments, you can compare the effects of market volatilities on Israel China and Feat Fund 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 Israel China with a short position of Feat Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and Feat Fund.

Diversification Opportunities for Israel China and Feat Fund

-0.22

Correlation Coefficient

Israel China  Feat Fund

Very good diversification

The 3 months correlation between Israel and Feat is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and Feat Fund Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feat Fund Investments and Israel China 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 Israel China Biotechnology are associated (or correlated) with Feat Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feat Fund Investments has no effect on the direction of Israel China i.e., Israel China and Feat Fund go up and down completely randomly.

Pair Corralation between Israel China and Feat Fund

Assuming the 90 days trading horizon Israel China Biotechnology is expected to under-perform the Feat Fund. In addition to that, Israel China is 3.36 times more volatile than Feat Fund Investments. It trades about -0.01 of its total potential returns per unit of risk. Feat Fund Investments is currently generating about 0.08 per unit of volatility. If you would invest  13,280  in Feat Fund Investments on December 2, 2024 and sell it today you would earn a total of  970.00  from holding Feat Fund Investments or generate 7.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.08%
Values	Daily Returns

Israel China Biotechnology  vs.  Feat Fund Investments

Israel China Biotech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Israel China Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Israel China is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Feat Fund Investments

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Feat Fund Investments are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Feat Fund may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Israel China and Feat Fund

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

The idea behind Israel China Biotechnology and Feat Fund 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.