Quant techniques and regime analysis for increase in trade & business between India and Israel

In this paper we have performed Monte Carlo Simulation, Multiple Linear Regression and Regime analysis for Projecting Trade & Business between India and Israel. The trade relations between India and Israel are extensively analyzed and predictions are being made using various mathematical models for their expansion. The effects of political regimes on economic relations are also evaluated. We have used regression and AR 1 models to predict imports (indexed over a broad range of products). The factors like High Tech machines & chemicals, which constitute most of the trade, are assumed as market parameters and are being utilized in forming multiple regression models. Two parameters that remain important in predicting import are exchange rate (currency) and market (Sensex) trends. In this work we also ran multiple regressions on Imports based on various factors and developed a multiple regression model. We have projected Import for the next 50 months and projected bilateral trade based on the import and changing the trade/import parameter. The deficiencies of trade between India and Israel are analyzed and also scenarios and segment drivers for the trade are also explored. We also studied the impact of terrorism and war on the trade and relations between India and Israel. In this regard, market movement in major terrorist attacks is compared and a stress testing methodology which could help us predict how markets would behave in case of another terror attack is proposed. We also pointed out areas where the cooperation could grow and use of Private Equity, joint ventures, and the financial aspects of Return on Equity for the same.