Correlation Between MEITAV INVESTMENTS and Bio View

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

By analyzing existing cross correlation between MEITAV INVESTMENTS HOUSE and Bio View, you can compare the effects of market volatilities on MEITAV INVESTMENTS and Bio View 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 MEITAV INVESTMENTS with a short position of Bio View. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEITAV INVESTMENTS and Bio View.

Diversification Opportunities for MEITAV INVESTMENTS and Bio View

0.27

Correlation Coefficient

MEITAV INVESTMENTS  Bio View

Modest diversification

The 3 months correlation between MEITAV and Bio is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding MEITAV INVESTMENTS HOUSE and Bio View in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio View and MEITAV INVESTMENTS 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 MEITAV INVESTMENTS HOUSE are associated (or correlated) with Bio View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio View has no effect on the direction of MEITAV INVESTMENTS i.e., MEITAV INVESTMENTS and Bio View go up and down completely randomly.

Pair Corralation between MEITAV INVESTMENTS and Bio View

Assuming the 90 days trading horizon MEITAV INVESTMENTS HOUSE is expected to generate 0.67 times more return on investment than Bio View. However, MEITAV INVESTMENTS HOUSE is 1.49 times less risky than Bio View. It trades about 0.59 of its potential returns per unit of risk. Bio View is currently generating about 0.08 per unit of risk. If you would invest  300,800  in MEITAV INVESTMENTS HOUSE on October 25, 2024 and sell it today you would earn a total of  62,700  from holding MEITAV INVESTMENTS HOUSE or generate 20.84% return on investment over 90 days.

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

MEITAV INVESTMENTS HOUSE  vs.  Bio View

MEITAV INVESTMENTS HOUSE

Risk-Adjusted Performance

46 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in MEITAV INVESTMENTS HOUSE are ranked lower than 46 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MEITAV INVESTMENTS sustained solid returns over the last few months and may actually be approaching a breakup point.

Bio View

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bio View has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bio View is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with MEITAV INVESTMENTS and Bio View

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

The idea behind MEITAV INVESTMENTS HOUSE and Bio View 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.