Correlation Between Analyst IMS and Aran Research
Can any of the company-specific risk be diversified away by investing in both Analyst IMS and Aran Research 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 Analyst IMS and Aran Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analyst IMS Investment and Aran Research and, you can compare the effects of market volatilities on Analyst IMS and Aran Research 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 Analyst IMS with a short position of Aran Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analyst IMS and Aran Research.
Diversification Opportunities for Analyst IMS and Aran Research
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Analyst and Aran is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Analyst IMS Investment and Aran Research and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aran Research and Analyst IMS 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 Analyst IMS Investment are associated (or correlated) with Aran Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aran Research has no effect on the direction of Analyst IMS i.e., Analyst IMS and Aran Research go up and down completely randomly.
Pair Corralation between Analyst IMS and Aran Research
Assuming the 90 days trading horizon Analyst IMS Investment is expected to generate 0.91 times more return on investment than Aran Research. However, Analyst IMS Investment is 1.1 times less risky than Aran Research. It trades about 0.48 of its potential returns per unit of risk. Aran Research and is currently generating about -0.12 per unit of risk. If you would invest 424,800 in Analyst IMS Investment on September 1, 2024 and sell it today you would earn a total of 35,400 from holding Analyst IMS Investment or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Analyst IMS Investment vs. Aran Research and
Performance |
| Timeline |
| Analyst IMS Investment |
| Aran Research |
Analyst IMS and Aran Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analyst IMS and Aran Research
The main advantage of trading using opposite Analyst IMS and Aran Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analyst IMS position performs unexpectedly, Aran Research 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 Aran Research will offset losses from the drop in Aran Research's long position.| Analyst IMS vs. TAT Technologies | Analyst IMS vs. Clal Biotechnology Industries | Analyst IMS vs. Spuntech | Analyst IMS vs. Elbit Medical Technologies |
| Aran Research vs. Arad | Aran Research vs. Alony Hetz Properties | Aran Research vs. Airport City | Aran Research vs. Harel Insurance Investments |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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