Correlation Between Salomon A and Shufersal
Can any of the company-specific risk be diversified away by investing in both Salomon A and Shufersal 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 Salomon A and Shufersal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salomon A Angel and Shufersal, you can compare the effects of market volatilities on Salomon A and Shufersal 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 Salomon A with a short position of Shufersal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salomon A and Shufersal.
Diversification Opportunities for Salomon A and Shufersal
Very good diversification
The 3 months correlation between Salomon and Shufersal is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Salomon A Angel and Shufersal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shufersal and Salomon A 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 Salomon A Angel are associated (or correlated) with Shufersal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shufersal has no effect on the direction of Salomon A i.e., Salomon A and Shufersal go up and down completely randomly.
Pair Corralation between Salomon A and Shufersal
Assuming the 90 days trading horizon Salomon A Angel is expected to generate 2.01 times more return on investment than Shufersal. However, Salomon A is 2.01 times more volatile than Shufersal. It trades about 0.15 of its potential returns per unit of risk. Shufersal is currently generating about 0.26 per unit of risk. If you would invest 304,700 in Salomon A Angel on September 12, 2024 and sell it today you would earn a total of 60,400 from holding Salomon A Angel or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salomon A Angel vs. Shufersal
Performance |
| Timeline |
| Salomon A Angel |
| Shufersal |
Salomon A and Shufersal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salomon A and Shufersal
The main advantage of trading using opposite Salomon A and Shufersal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salomon A position performs unexpectedly, Shufersal 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 Shufersal will offset losses from the drop in Shufersal's long position.| Salomon A vs. Rami Levi | Salomon A vs. Neto ME Holdings | Salomon A vs. Shufersal | Salomon A vs. Strauss Group |
| Shufersal vs. Rami Levi | Shufersal vs. Neto ME Holdings | Shufersal vs. Strauss Group | Shufersal 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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