Correlation Between Israel China and YD More

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

Diversification Opportunities for Israel China and YD More

-0.31

Correlation Coefficient

Israel China  YD More

Very good diversification

The 3 months correlation between Israel and MRIN is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology and YD More Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YD More 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 YD More. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YD More Investments has no effect on the direction of Israel China i.e., Israel China and YD More go up and down completely randomly.

Pair Corralation between Israel China and YD More

Assuming the 90 days trading horizon Israel China Biotechnology is expected to generate 17.19 times more return on investment than YD More. However, Israel China is 17.19 times more volatile than YD More Investments. It trades about 0.06 of its potential returns per unit of risk. YD More Investments is currently generating about 0.08 per unit of risk. If you would invest  10,400  in Israel China Biotechnology on October 9, 2024 and sell it today you would earn a total of  47,290  from holding Israel China Biotechnology or generate 454.71% return on investment over 90 days.

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

Israel China Biotechnology  vs.  YD More Investments

Israel China Biotech

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Israel China Biotechnology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Israel China may actually be approaching a critical reversion point that can send shares even higher in February 2025.

YD More Investments

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in YD More Investments are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, YD More sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Israel China and YD More

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

The idea behind Israel China Biotechnology and YD More 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.