Correlation Between Meitav Dash and Internet Gold

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

Diversification Opportunities for Meitav Dash and Internet Gold

-0.33

Correlation Coefficient

Meitav Dash  Internet Gold

Very good diversification

The 3 months correlation between Meitav and Internet is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Meitav Dash Investments and Internet Gold Golden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Gold Golden 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 Internet Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Gold Golden has no effect on the direction of Meitav Dash i.e., Meitav Dash and Internet Gold go up and down completely randomly.

Pair Corralation between Meitav Dash and Internet Gold

Assuming the 90 days trading horizon Meitav Dash is expected to generate 4.25 times less return on investment than Internet Gold. But when comparing it to its historical volatility, Meitav Dash Investments is 16.6 times less risky than Internet Gold. It trades about 0.66 of its potential returns per unit of risk. Internet Gold Golden is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  30,800  in Internet Gold Golden on October 26, 2024 and sell it today you would earn a total of  16,890  from holding Internet Gold Golden or generate 54.84% return on investment over 90 days.

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

Meitav Dash Investments  vs.  Internet Gold Golden

Meitav Dash Investments

Risk-Adjusted Performance

45 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Meitav Dash Investments are ranked lower than 45 (%) 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.

Internet Gold Golden

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Internet Gold Golden are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Internet Gold sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Meitav Dash and Internet Gold

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

The idea behind Meitav Dash Investments and Internet Gold Golden 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.