Correlation Between MEITAV INVESTMENTS and Israel China

Can any of the company-specific risk be diversified away by investing in both MEITAV INVESTMENTS and Israel China 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 Israel China 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 Israel China Biotechnology, you can compare the effects of market volatilities on MEITAV INVESTMENTS and Israel China 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 Israel China. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEITAV INVESTMENTS and Israel China.

Diversification Opportunities for MEITAV INVESTMENTS and Israel China

-0.59

Correlation Coefficient

MEITAV INVESTMENTS  Israel China

Excellent diversification

The 3 months correlation between MEITAV and Israel is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding MEITAV INVESTMENTS HOUSE and Israel China Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel China Biotech 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 Israel China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel China Biotech has no effect on the direction of MEITAV INVESTMENTS i.e., MEITAV INVESTMENTS and Israel China go up and down completely randomly.

Pair Corralation between MEITAV INVESTMENTS and Israel China

Assuming the 90 days trading horizon MEITAV INVESTMENTS HOUSE is expected to generate 0.36 times more return on investment than Israel China. However, MEITAV INVESTMENTS HOUSE is 2.74 times less risky than Israel China. It trades about 0.34 of its potential returns per unit of risk. Israel China Biotechnology is currently generating about -0.02 per unit of risk. If you would invest  291,339  in MEITAV INVESTMENTS HOUSE on December 30, 2024 and sell it today you would earn a total of  149,661  from holding MEITAV INVESTMENTS HOUSE or generate 51.37% return on investment over 90 days.

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

MEITAV INVESTMENTS HOUSE  vs.  Israel China Biotechnology

MEITAV INVESTMENTS HOUSE

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in MEITAV INVESTMENTS HOUSE are ranked lower than 26 (%) 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.

Israel China Biotech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Israel China Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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 MEITAV INVESTMENTS and Israel China

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

The idea behind MEITAV INVESTMENTS HOUSE and Israel China Biotechnology 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.