Correlation Between Brimag L and Schnapp
Can any of the company-specific risk be diversified away by investing in both Brimag L and Schnapp 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 Brimag L and Schnapp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brimag L and Schnapp, you can compare the effects of market volatilities on Brimag L and Schnapp 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 Brimag L with a short position of Schnapp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brimag L and Schnapp.
Diversification Opportunities for Brimag L and Schnapp
Poor diversification
The 3 months correlation between Brimag and Schnapp is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Brimag L and Schnapp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schnapp and Brimag L 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 Brimag L are associated (or correlated) with Schnapp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schnapp has no effect on the direction of Brimag L i.e., Brimag L and Schnapp go up and down completely randomly.
Pair Corralation between Brimag L and Schnapp
Assuming the 90 days trading horizon Brimag L is expected to generate 1.16 times less return on investment than Schnapp. In addition to that, Brimag L is 1.04 times more volatile than Schnapp. It trades about 0.34 of its total potential returns per unit of risk. Schnapp is currently generating about 0.41 per unit of volatility. If you would invest 124,728 in Schnapp on September 14, 2024 and sell it today you would earn a total of 40,972 from holding Schnapp or generate 32.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brimag L vs. Schnapp
Performance |
| Timeline |
| Brimag L |
| Schnapp |
Brimag L and Schnapp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brimag L and Schnapp
The main advantage of trading using opposite Brimag L and Schnapp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brimag L position performs unexpectedly, Schnapp 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 Schnapp will offset losses from the drop in Schnapp's long position.| Brimag L vs. Migdal Insurance | Brimag L vs. Clal Insurance Enterprises | Brimag L vs. Bank Leumi Le Israel | Brimag L vs. Israel Discount Bank |
| Schnapp vs. Ralco Agencies | Schnapp vs. Nextcom | Schnapp vs. Brimag L | Schnapp vs. Delek Automotive Systems |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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