Correlation Between MEITAV INVESTMENTS and Levinski Ofer

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

Diversification Opportunities for MEITAV INVESTMENTS and Levinski Ofer

0.8

Correlation Coefficient

MEITAV INVESTMENTS  Levinski Ofer

Very poor diversification

The 3 months correlation between MEITAV and Levinski is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding MEITAV INVESTMENTS HOUSE and Levinski Ofer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levinski Ofer 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 Levinski Ofer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Levinski Ofer has no effect on the direction of MEITAV INVESTMENTS i.e., MEITAV INVESTMENTS and Levinski Ofer go up and down completely randomly.

Pair Corralation between MEITAV INVESTMENTS and Levinski Ofer

Assuming the 90 days trading horizon MEITAV INVESTMENTS HOUSE is expected to generate 0.72 times more return on investment than Levinski Ofer. However, MEITAV INVESTMENTS HOUSE is 1.38 times less risky than Levinski Ofer. It trades about 0.37 of its potential returns per unit of risk. Levinski Ofer is currently generating about 0.23 per unit of risk. If you would invest  180,211  in MEITAV INVESTMENTS HOUSE on September 5, 2024 and sell it today you would earn a total of  93,689  from holding MEITAV INVESTMENTS HOUSE or generate 51.99% return on investment over 90 days.

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

MEITAV INVESTMENTS HOUSE  vs.  Levinski Ofer

MEITAV INVESTMENTS HOUSE

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in MEITAV INVESTMENTS HOUSE are ranked lower than 28 (%) 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.

Levinski Ofer

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Levinski Ofer are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Levinski Ofer sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MEITAV INVESTMENTS and Levinski Ofer

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

The idea behind MEITAV INVESTMENTS HOUSE and Levinski Ofer 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.