Correlation Between Meitav Dash and Aquarius Engines

Can any of the company-specific risk be diversified away by investing in both Meitav Dash and Aquarius Engines 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 Dash and Aquarius Engines into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Meitav Dash Investments and Aquarius Engines AM, you can compare the effects of market volatilities on Meitav Dash and Aquarius Engines 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 Dash with a short position of Aquarius Engines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meitav Dash and Aquarius Engines.

Diversification Opportunities for Meitav Dash and Aquarius Engines

-0.7

Correlation Coefficient

Meitav Dash  Aquarius Engines

Excellent diversification

The 3 months correlation between Meitav and Aquarius is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Meitav Dash Investments and Aquarius Engines AM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquarius Engines and Meitav Dash 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 Dash Investments are associated (or correlated) with Aquarius Engines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquarius Engines has no effect on the direction of Meitav Dash i.e., Meitav Dash and Aquarius Engines go up and down completely randomly.

Pair Corralation between Meitav Dash and Aquarius Engines

Assuming the 90 days trading horizon Meitav Dash Investments is expected to generate 0.61 times more return on investment than Aquarius Engines. However, Meitav Dash Investments is 1.64 times less risky than Aquarius Engines. It trades about 0.33 of its potential returns per unit of risk. Aquarius Engines AM is currently generating about -0.18 per unit of risk. If you would invest  184,400  in Meitav Dash Investments on September 3, 2024 and sell it today you would earn a total of  84,700  from holding Meitav Dash Investments or generate 45.93% return on investment over 90 days.

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

Meitav Dash Investments  vs.  Aquarius Engines AM

Meitav Dash Investments

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Meitav Dash Investments are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Meitav Dash sustained solid returns over the last few months and may actually be approaching a breakup point.

Aquarius Engines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aquarius Engines AM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Meitav Dash and Aquarius Engines

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

The idea behind Meitav Dash Investments and Aquarius Engines AM 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.