Correlation Between Norstar and MEITAV INVESTMENTS

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

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

Diversification Opportunities for Norstar and MEITAV INVESTMENTS

-0.86

Correlation Coefficient

Norstar  MEITAV INVESTMENTS

Pay attention - limited upside

The 3 months correlation between Norstar and MEITAV is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Norstar and MEITAV INVESTMENTS HOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEITAV INVESTMENTS HOUSE and Norstar 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 Norstar are associated (or correlated) with MEITAV INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEITAV INVESTMENTS HOUSE has no effect on the direction of Norstar i.e., Norstar and MEITAV INVESTMENTS go up and down completely randomly.

Pair Corralation between Norstar and MEITAV INVESTMENTS

Assuming the 90 days trading horizon Norstar is expected to under-perform the MEITAV INVESTMENTS. In addition to that, Norstar is 1.1 times more volatile than MEITAV INVESTMENTS HOUSE. It trades about -0.2 of its total potential returns per unit of risk. MEITAV INVESTMENTS HOUSE is currently generating about 0.34 per unit of volatility. If you would invest  291,339  in MEITAV INVESTMENTS HOUSE on December 30, 2024 and sell it today you would earn a total of  149,661  from holding MEITAV INVESTMENTS HOUSE or generate 51.37% return on investment over 90 days.

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

Norstar  vs.  MEITAV INVESTMENTS HOUSE

Norstar

Risk-Adjusted Performance

Very Weak

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

MEITAV INVESTMENTS HOUSE

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in MEITAV INVESTMENTS HOUSE are ranked lower than 26 (%) 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.

Pair Trading with Norstar and MEITAV INVESTMENTS

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

The idea behind Norstar and MEITAV INVESTMENTS HOUSE 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.