Correlation Between Al Bad and Gan Shmuel
Can any of the company-specific risk be diversified away by investing in both Al Bad and Gan Shmuel 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 Al Bad and Gan Shmuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Al Bad Massuot Yitzhak and Gan Shmuel, you can compare the effects of market volatilities on Al Bad and Gan Shmuel 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 Al Bad with a short position of Gan Shmuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Bad and Gan Shmuel.
Diversification Opportunities for Al Bad and Gan Shmuel
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ALBA and Gan is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Al Bad Massuot Yitzhak and Gan Shmuel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan Shmuel and Al Bad 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 Al Bad Massuot Yitzhak are associated (or correlated) with Gan Shmuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan Shmuel has no effect on the direction of Al Bad i.e., Al Bad and Gan Shmuel go up and down completely randomly.
Pair Corralation between Al Bad and Gan Shmuel
Assuming the 90 days trading horizon Al Bad Massuot Yitzhak is expected to generate 1.94 times more return on investment than Gan Shmuel. However, Al Bad is 1.94 times more volatile than Gan Shmuel. It trades about 0.18 of its potential returns per unit of risk. Gan Shmuel is currently generating about 0.14 per unit of risk. If you would invest 176,400 in Al Bad Massuot Yitzhak on September 1, 2024 and sell it today you would earn a total of 17,900 from holding Al Bad Massuot Yitzhak or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Al Bad Massuot Yitzhak vs. Gan Shmuel
Performance |
| Timeline |
| Al Bad Massuot |
| Gan Shmuel |
Al Bad and Gan Shmuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Bad and Gan Shmuel
The main advantage of trading using opposite Al Bad and Gan Shmuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Bad position performs unexpectedly, Gan Shmuel 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 Gan Shmuel will offset losses from the drop in Gan Shmuel's long position.| Al Bad vs. Alony Hetz Properties | Al Bad vs. Shufersal | Al Bad vs. Delek Automotive Systems | Al Bad vs. Tiv Taam |
| Gan Shmuel vs. Kerur Holdings | Gan Shmuel vs. Sano Brunos Enterprises | Gan Shmuel vs. Al Bad Massuot Yitzhak |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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