Correlation Between MediPress Health and Israel Corp

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

By analyzing existing cross correlation between MediPress Health Limited Partnership and Israel Corp, you can compare the effects of market volatilities on MediPress Health and Israel Corp 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 MediPress Health with a short position of Israel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediPress Health and Israel Corp.

Diversification Opportunities for MediPress Health and Israel Corp

0.15

Correlation Coefficient

MediPress Health  Israel Corp

Average diversification

The 3 months correlation between MediPress and Israel is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding MediPress Health Limited Partn and Israel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Corp and MediPress Health 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 MediPress Health Limited Partnership are associated (or correlated) with Israel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Corp has no effect on the direction of MediPress Health i.e., MediPress Health and Israel Corp go up and down completely randomly.

Pair Corralation between MediPress Health and Israel Corp

Assuming the 90 days trading horizon MediPress Health is expected to generate 2.93 times less return on investment than Israel Corp. But when comparing it to its historical volatility, MediPress Health Limited Partnership is 1.4 times less risky than Israel Corp. It trades about 0.09 of its potential returns per unit of risk. Israel Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  7,727,000  in Israel Corp on September 12, 2024 and sell it today you would earn a total of  2,073,000  from holding Israel Corp or generate 26.83% return on investment over 90 days.

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

MediPress Health Limited Partn  vs.  Israel Corp

MediPress Health Lim

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MediPress Health Limited Partnership are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MediPress Health may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Israel Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Israel Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Israel Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MediPress Health and Israel Corp

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

The idea behind MediPress Health Limited Partnership and Israel Corp 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.