Correlation Between Meitav Trade and Inbar Group

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

By analyzing existing cross correlation between Meitav Trade Inv and Inbar Group Finance, you can compare the effects of market volatilities on Meitav Trade and Inbar Group 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 Trade with a short position of Inbar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meitav Trade and Inbar Group.

Diversification Opportunities for Meitav Trade and Inbar Group

0.28

Correlation Coefficient

Meitav Trade  Inbar Group

Modest diversification

The 3 months correlation between Meitav and Inbar is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Meitav Trade Inv and Inbar Group Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inbar Group Finance and Meitav Trade 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 Trade Inv are associated (or correlated) with Inbar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inbar Group Finance has no effect on the direction of Meitav Trade i.e., Meitav Trade and Inbar Group go up and down completely randomly.

Pair Corralation between Meitav Trade and Inbar Group

Assuming the 90 days trading horizon Meitav Trade Inv is expected to generate 34.25 times more return on investment than Inbar Group. However, Meitav Trade is 34.25 times more volatile than Inbar Group Finance. It trades about 0.15 of its potential returns per unit of risk. Inbar Group Finance is currently generating about 0.22 per unit of risk. If you would invest  820.00  in Meitav Trade Inv on September 12, 2024 and sell it today you would earn a total of  106,680  from holding Meitav Trade Inv or generate 13009.76% return on investment over 90 days.

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

Meitav Trade Inv  vs.  Inbar Group Finance

Meitav Trade Inv

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Meitav Trade Inv are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Meitav Trade sustained solid returns over the last few months and may actually be approaching a breakup point.

Inbar Group Finance

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Inbar Group Finance are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Inbar Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Meitav Trade and Inbar Group

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

The idea behind Meitav Trade Inv and Inbar Group Finance 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.