Correlation Between Menora Mivtachim and Albemarle

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

By analyzing existing cross correlation between Menora Mivtachim Holdings and Albemarle, you can compare the effects of market volatilities on Menora Mivtachim and Albemarle 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 Menora Mivtachim with a short position of Albemarle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Menora Mivtachim and Albemarle.

Diversification Opportunities for Menora Mivtachim and Albemarle

-0.53

Correlation Coefficient

Menora Mivtachim  Albemarle

Excellent diversification

The 3 months correlation between Menora and Albemarle is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Menora Mivtachim Holdings and Albemarle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albemarle and Menora Mivtachim 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 Menora Mivtachim Holdings are associated (or correlated) with Albemarle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albemarle has no effect on the direction of Menora Mivtachim i.e., Menora Mivtachim and Albemarle go up and down completely randomly.

Pair Corralation between Menora Mivtachim and Albemarle

Assuming the 90 days horizon Menora Mivtachim Holdings is expected to generate 0.36 times more return on investment than Albemarle. However, Menora Mivtachim Holdings is 2.8 times less risky than Albemarle. It trades about 0.1 of its potential returns per unit of risk. Albemarle is currently generating about -0.02 per unit of risk. If you would invest  1,563  in Menora Mivtachim Holdings on October 12, 2024 and sell it today you would earn a total of  942.00  from holding Menora Mivtachim Holdings or generate 60.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	43.06%
Values	Daily Returns

Menora Mivtachim Holdings  vs.  Albemarle

Menora Mivtachim Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Menora Mivtachim Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Menora Mivtachim may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Albemarle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Albemarle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Menora Mivtachim and Albemarle

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

The idea behind Menora Mivtachim Holdings and Albemarle 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.