Correlation Between IDI Insurance and YD More
Can any of the company-specific risk be diversified away by investing in both IDI Insurance 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 IDI Insurance and YD More into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDI Insurance and YD More Investments, you can compare the effects of market volatilities on IDI Insurance 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 IDI Insurance with a short position of YD More. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDI Insurance and YD More.
Diversification Opportunities for IDI Insurance and YD More
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IDI and MRIN is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding IDI Insurance 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 IDI Insurance 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 IDI Insurance 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 IDI Insurance i.e., IDI Insurance and YD More go up and down completely randomly.
Pair Corralation between IDI Insurance and YD More
Assuming the 90 days trading horizon IDI Insurance is expected to generate 1.57 times less return on investment than YD More. But when comparing it to its historical volatility, IDI Insurance is 1.78 times less risky than YD More. It trades about 0.48 of its potential returns per unit of risk. YD More Investments is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 145,100 in YD More Investments on December 4, 2024 and sell it today you would earn a total of 28,900 from holding YD More Investments or generate 19.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
IDI Insurance vs. YD More Investments
Performance |
Timeline |
IDI Insurance |
YD More Investments |
IDI Insurance and YD More Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IDI Insurance and YD More
The main advantage of trading using opposite IDI Insurance and YD More positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDI Insurance 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.IDI Insurance vs. Harel Insurance Investments | IDI Insurance vs. Migdal Insurance | IDI Insurance vs. Menora Miv Hld | IDI Insurance vs. The Phoenix Holdings |
YD More vs. Bank Leumi Le Israel | YD More vs. Mizrahi Tefahot | YD More vs. Israel Discount Bank | YD More vs. Bank Hapoalim |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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