Correlation Between Averbuch Formica and EN Shoham
Can any of the company-specific risk be diversified away by investing in both Averbuch Formica and EN Shoham 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 Averbuch Formica and EN Shoham into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Averbuch Formica Center and EN Shoham Business, you can compare the effects of market volatilities on Averbuch Formica and EN Shoham 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 Averbuch Formica with a short position of EN Shoham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Averbuch Formica and EN Shoham.
Diversification Opportunities for Averbuch Formica and EN Shoham
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Averbuch and SHOM is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Averbuch Formica Center and EN Shoham Business in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EN Shoham Business and Averbuch Formica 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 Averbuch Formica Center are associated (or correlated) with EN Shoham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EN Shoham Business has no effect on the direction of Averbuch Formica i.e., Averbuch Formica and EN Shoham go up and down completely randomly.
Pair Corralation between Averbuch Formica and EN Shoham
Assuming the 90 days trading horizon Averbuch Formica Center is expected to generate 2.63 times more return on investment than EN Shoham. However, Averbuch Formica is 2.63 times more volatile than EN Shoham Business. It trades about 0.23 of its potential returns per unit of risk. EN Shoham Business is currently generating about 0.58 per unit of risk. If you would invest 95,870 in Averbuch Formica Center on September 12, 2024 and sell it today you would earn a total of 25,930 from holding Averbuch Formica Center or generate 27.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Averbuch Formica Center vs. EN Shoham Business
Performance |
| Timeline |
| Averbuch Formica Center |
| EN Shoham Business |
Averbuch Formica and EN Shoham Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Averbuch Formica and EN Shoham
The main advantage of trading using opposite Averbuch Formica and EN Shoham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Averbuch Formica position performs unexpectedly, EN Shoham 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 EN Shoham will offset losses from the drop in EN Shoham's long position.| Averbuch Formica vs. Cohen Dev | Averbuch Formica vs. Brimag L | Averbuch Formica vs. Adgar Investments and | Averbuch Formica vs. Aran Research and |
| EN Shoham vs. Bank Hapoalim | EN Shoham vs. Israel Discount Bank | EN Shoham vs. Mizrahi Tefahot | EN Shoham vs. Bezeq Israeli Telecommunication |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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