Correlation Between Mizrahi Tefahot and Gencell

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

By analyzing existing cross correlation between Mizrahi Tefahot and Gencell, you can compare the effects of market volatilities on Mizrahi Tefahot and Gencell 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 Mizrahi Tefahot with a short position of Gencell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizrahi Tefahot and Gencell.

Diversification Opportunities for Mizrahi Tefahot and Gencell

-0.49

Correlation Coefficient

Mizrahi Tefahot  Gencell

Very good diversification

The 3 months correlation between Mizrahi and Gencell is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mizrahi Tefahot and Gencell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gencell and Mizrahi Tefahot 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 Mizrahi Tefahot are associated (or correlated) with Gencell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gencell has no effect on the direction of Mizrahi Tefahot i.e., Mizrahi Tefahot and Gencell go up and down completely randomly.

Pair Corralation between Mizrahi Tefahot and Gencell

Assuming the 90 days trading horizon Mizrahi Tefahot is expected to generate 0.3 times more return on investment than Gencell. However, Mizrahi Tefahot is 3.28 times less risky than Gencell. It trades about 0.11 of its potential returns per unit of risk. Gencell is currently generating about -0.21 per unit of risk. If you would invest  1,557,422  in Mizrahi Tefahot on December 31, 2024 and sell it today you would earn a total of  121,578  from holding Mizrahi Tefahot or generate 7.81% return on investment over 90 days.

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

Mizrahi Tefahot  vs.  Gencell

Mizrahi Tefahot

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mizrahi Tefahot are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mizrahi Tefahot may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Gencell

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gencell 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 May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Mizrahi Tefahot and Gencell

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

The idea behind Mizrahi Tefahot and Gencell 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.