Correlation Between Castro and Rami Levi
Can any of the company-specific risk be diversified away by investing in both Castro and Rami Levi 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 Castro and Rami Levi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castro and Rami Levi, you can compare the effects of market volatilities on Castro and Rami Levi 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 Castro with a short position of Rami Levi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castro and Rami Levi.
Diversification Opportunities for Castro and Rami Levi
Very poor diversification
The 3 months correlation between Castro and Rami is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Castro and Rami Levi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rami Levi and Castro 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 Castro are associated (or correlated) with Rami Levi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rami Levi has no effect on the direction of Castro i.e., Castro and Rami Levi go up and down completely randomly.
Pair Corralation between Castro and Rami Levi
Assuming the 90 days trading horizon Castro is expected to generate 1.98 times more return on investment than Rami Levi. However, Castro is 1.98 times more volatile than Rami Levi. It trades about 0.23 of its potential returns per unit of risk. Rami Levi is currently generating about 0.14 per unit of risk. If you would invest 1,080,000 in Castro on November 28, 2024 and sell it today you would earn a total of 140,000 from holding Castro or generate 12.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Castro vs. Rami Levi
Performance |
| Timeline |
| Castro |
| Rami Levi |
Castro and Rami Levi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castro and Rami Levi
The main advantage of trading using opposite Castro and Rami Levi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castro position performs unexpectedly, Rami Levi 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 Rami Levi will offset losses from the drop in Rami Levi's long position.| Castro vs. Fox Wizel | Castro vs. Golf Co Group | Castro vs. Bezeq Israeli Telecommunication | Castro vs. Azrieli Group |
| Rami Levi vs. Shufersal | Rami Levi vs. Bank Leumi Le Israel | Rami Levi vs. Bezeq Israeli Telecommunication | Rami Levi vs. Bank Hapoalim |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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