Correlation Between C Mer and Rimon Consulting
Can any of the company-specific risk be diversified away by investing in both C Mer and Rimon Consulting 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 C Mer and Rimon Consulting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C Mer Industries and Rimon Consulting Management, you can compare the effects of market volatilities on C Mer and Rimon Consulting 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 C Mer with a short position of Rimon Consulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Mer and Rimon Consulting.
Diversification Opportunities for C Mer and Rimon Consulting
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CMER and Rimon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding C Mer Industries and Rimon Consulting Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rimon Consulting Man and C Mer 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 C Mer Industries are associated (or correlated) with Rimon Consulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rimon Consulting Man has no effect on the direction of C Mer i.e., C Mer and Rimon Consulting go up and down completely randomly.
Pair Corralation between C Mer and Rimon Consulting
Assuming the 90 days trading horizon C Mer Industries is expected to generate 1.47 times more return on investment than Rimon Consulting. However, C Mer is 1.47 times more volatile than Rimon Consulting Management. It trades about 0.11 of its potential returns per unit of risk. Rimon Consulting Management is currently generating about 0.06 per unit of risk. If you would invest 52,800 in C Mer Industries on September 4, 2024 and sell it today you would earn a total of 164,500 from holding C Mer Industries or generate 311.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
C Mer Industries vs. Rimon Consulting Management
Performance |
| Timeline |
| C Mer Industries |
| Rimon Consulting Man |
C Mer and Rimon Consulting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Mer and Rimon Consulting
The main advantage of trading using opposite C Mer and Rimon Consulting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Mer position performs unexpectedly, Rimon Consulting 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 Rimon Consulting will offset losses from the drop in Rimon Consulting's long position.| C Mer vs. EN Shoham Business | C Mer vs. Accel Solutions Group | C Mer vs. Mivtach Shamir | C Mer vs. Rani Zim Shopping |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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