Correlation Between Sure Tech and Meitav Trade

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

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

Diversification Opportunities for Sure Tech and Meitav Trade

0.21

Correlation Coefficient

Sure Tech  Meitav Trade

Modest diversification

The 3 months correlation between Sure and Meitav is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sure Tech Investments LP and Meitav Trade Inv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meitav Trade Inv and Sure Tech 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 Sure Tech Investments LP are associated (or correlated) with Meitav Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meitav Trade Inv has no effect on the direction of Sure Tech i.e., Sure Tech and Meitav Trade go up and down completely randomly.

Pair Corralation between Sure Tech and Meitav Trade

Assuming the 90 days trading horizon Sure Tech Investments LP is expected to under-perform the Meitav Trade. But the stock apears to be less risky and, when comparing its historical volatility, Sure Tech Investments LP is 1.05 times less risky than Meitav Trade. The stock trades about -0.05 of its potential returns per unit of risk. The Meitav Trade Inv is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest  110,000  in Meitav Trade Inv on December 20, 2024 and sell it today you would earn a total of  102,300  from holding Meitav Trade Inv or generate 93.0% return on investment over 90 days.

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

Sure Tech Investments LP  vs.  Meitav Trade Inv

Sure Tech Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sure Tech Investments LP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Meitav Trade Inv

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Meitav Trade Inv are ranked lower than 43 (%) 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.

Pair Trading with Sure Tech and Meitav Trade

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

The idea behind Sure Tech Investments LP and Meitav Trade Inv 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.