Correlation Between Isras Investment and YH Dimri

Can any of the company-specific risk be diversified away by investing in both Isras Investment and YH Dimri 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 Isras Investment and YH Dimri into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Isras Investment and YH Dimri Construction, you can compare the effects of market volatilities on Isras Investment and YH Dimri 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 Isras Investment with a short position of YH Dimri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Isras Investment and YH Dimri.

Diversification Opportunities for Isras Investment and YH Dimri

0.75

Correlation Coefficient

Isras Investment  YH Dimri

Poor diversification

The 3 months correlation between Isras and DIMRI is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Isras Investment and YH Dimri Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YH Dimri Construction and Isras Investment 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 Isras Investment are associated (or correlated) with YH Dimri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YH Dimri Construction has no effect on the direction of Isras Investment i.e., Isras Investment and YH Dimri go up and down completely randomly.

Pair Corralation between Isras Investment and YH Dimri

Assuming the 90 days trading horizon Isras Investment is expected to generate 1.05 times more return on investment than YH Dimri. However, Isras Investment is 1.05 times more volatile than YH Dimri Construction. It trades about -0.13 of its potential returns per unit of risk. YH Dimri Construction is currently generating about -0.2 per unit of risk. If you would invest  8,787,000  in Isras Investment on December 24, 2024 and sell it today you would lose (1,047,000) from holding Isras Investment or give up 11.92% of portfolio value over 90 days.

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

Isras Investment  vs.  YH Dimri Construction

Isras Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Isras Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

YH Dimri Construction

Risk-Adjusted Performance

Very Weak

Over the last 90 days YH Dimri Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Isras Investment and YH Dimri

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

The idea behind Isras Investment and YH Dimri Construction 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.