Correlation Between YH Dimri and NewMed Energy
Can any of the company-specific risk be diversified away by investing in both YH Dimri and NewMed Energy 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 YH Dimri and NewMed Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YH Dimri Construction and NewMed Energy , you can compare the effects of market volatilities on YH Dimri and NewMed Energy 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 YH Dimri with a short position of NewMed Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of YH Dimri and NewMed Energy.
Diversification Opportunities for YH Dimri and NewMed Energy
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DIMRI and NewMed is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding YH Dimri Construction and NewMed Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewMed Energy and YH Dimri 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 YH Dimri Construction are associated (or correlated) with NewMed Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewMed Energy has no effect on the direction of YH Dimri i.e., YH Dimri and NewMed Energy go up and down completely randomly.
Pair Corralation between YH Dimri and NewMed Energy
Assuming the 90 days trading horizon YH Dimri Construction is expected to under-perform the NewMed Energy. In addition to that, YH Dimri is 1.11 times more volatile than NewMed Energy . It trades about -0.1 of its total potential returns per unit of risk. NewMed Energy is currently generating about 0.27 per unit of volatility. If you would invest 115,400 in NewMed Energy on November 3, 2024 and sell it today you would earn a total of 8,800 from holding NewMed Energy or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YH Dimri Construction vs. NewMed Energy
Performance |
| Timeline |
| YH Dimri Construction |
| NewMed Energy |
YH Dimri and NewMed Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YH Dimri and NewMed Energy
The main advantage of trading using opposite YH Dimri and NewMed Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YH Dimri position performs unexpectedly, NewMed Energy 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 NewMed Energy will offset losses from the drop in NewMed Energy's long position.| YH Dimri vs. Azrieli Group | YH Dimri vs. Israel Canada | YH Dimri vs. Ashtrom Group | YH Dimri vs. Shikun Binui |
| NewMed Energy vs. Nice | NewMed Energy vs. The Gold Bond | NewMed Energy vs. Bank Leumi Le Israel | NewMed Energy vs. ICL Israel Chemicals |
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 CEOs Directory module to screen CEOs from public companies around the world.
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