Correlation Between MEITAV INVESTMENTS and Wesure Global

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

Diversification Opportunities for MEITAV INVESTMENTS and Wesure Global

0.88

Correlation Coefficient

MEITAV INVESTMENTS  Wesure Global

Very poor diversification

The 3 months correlation between MEITAV and Wesure is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding MEITAV INVESTMENTS HOUSE and Wesure Global Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesure Global Tech 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 Wesure Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesure Global Tech has no effect on the direction of MEITAV INVESTMENTS i.e., MEITAV INVESTMENTS and Wesure Global go up and down completely randomly.

Pair Corralation between MEITAV INVESTMENTS and Wesure Global

Assuming the 90 days trading horizon MEITAV INVESTMENTS HOUSE is expected to generate 0.78 times more return on investment than Wesure Global. However, MEITAV INVESTMENTS HOUSE is 1.29 times less risky than Wesure Global. It trades about 0.59 of its potential returns per unit of risk. Wesure Global Tech is currently generating about 0.28 per unit of risk. If you would invest  188,059  in MEITAV INVESTMENTS HOUSE on October 26, 2024 and sell it today you would earn a total of  179,341  from holding MEITAV INVESTMENTS HOUSE or generate 95.36% 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.  Wesure Global Tech

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.

Wesure Global Tech

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wesure Global Tech are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wesure Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MEITAV INVESTMENTS and Wesure Global

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

The idea behind MEITAV INVESTMENTS HOUSE and Wesure Global Tech 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.