Correlation Between Camtek and Sapiens International
Can any of the company-specific risk be diversified away by investing in both Camtek and Sapiens International 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 Camtek and Sapiens International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camtek and Sapiens International, you can compare the effects of market volatilities on Camtek and Sapiens International 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 Camtek with a short position of Sapiens International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camtek and Sapiens International.
Diversification Opportunities for Camtek and Sapiens International
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Camtek and Sapiens is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Camtek and Sapiens International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapiens International and Camtek 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 Camtek are associated (or correlated) with Sapiens International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapiens International has no effect on the direction of Camtek i.e., Camtek and Sapiens International go up and down completely randomly.
Pair Corralation between Camtek and Sapiens International
Assuming the 90 days trading horizon Camtek is expected to generate 0.54 times more return on investment than Sapiens International. However, Camtek is 1.84 times less risky than Sapiens International. It trades about -0.19 of its potential returns per unit of risk. Sapiens International is currently generating about -0.25 per unit of risk. If you would invest 2,978,000 in Camtek on August 27, 2024 and sell it today you would lose (346,000) from holding Camtek or give up 11.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camtek vs. Sapiens International
Performance |
| Timeline |
| Camtek |
| Sapiens International |
Camtek and Sapiens International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camtek and Sapiens International
The main advantage of trading using opposite Camtek and Sapiens International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camtek position performs unexpectedly, Sapiens International 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 Sapiens International will offset losses from the drop in Sapiens International's long position.The idea behind Camtek and Sapiens International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sapiens International vs. Nova | Sapiens International vs. Nice | Sapiens International vs. Matrix | Sapiens International vs. Magic Software Enterprises |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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