Correlation Between Arad and Amir Marketing
Can any of the company-specific risk be diversified away by investing in both Arad and Amir Marketing 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 Arad and Amir Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arad and Amir Marketing and, you can compare the effects of market volatilities on Arad and Amir Marketing 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 Arad with a short position of Amir Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arad and Amir Marketing.
Diversification Opportunities for Arad and Amir Marketing
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Arad and Amir is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Arad and Amir Marketing and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amir Marketing and Arad 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 Arad are associated (or correlated) with Amir Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amir Marketing has no effect on the direction of Arad i.e., Arad and Amir Marketing go up and down completely randomly.
Pair Corralation between Arad and Amir Marketing
Assuming the 90 days trading horizon Arad is expected to generate 3.05 times less return on investment than Amir Marketing. But when comparing it to its historical volatility, Arad is 1.36 times less risky than Amir Marketing. It trades about 0.11 of its potential returns per unit of risk. Amir Marketing and is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 276,000 in Amir Marketing and on August 29, 2024 and sell it today you would earn a total of 28,900 from holding Amir Marketing and or generate 10.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arad vs. Amir Marketing and
Performance |
| Timeline |
| Arad |
| Amir Marketing |
Arad and Amir Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arad and Amir Marketing
The main advantage of trading using opposite Arad and Amir Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arad position performs unexpectedly, Amir Marketing 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 Amir Marketing will offset losses from the drop in Amir Marketing's long position.| Arad vs. Libra Insurance | Arad vs. Arad Investment Industrial | Arad vs. Clal Insurance Enterprises | Arad vs. Hiron Trade Investments Industrial |
| Amir Marketing vs. Arad | Amir Marketing vs. Alony Hetz Properties | Amir Marketing vs. Danel | Amir Marketing vs. Airport City |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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