Correlation Between Energix Renewable and Arad
Can any of the company-specific risk be diversified away by investing in both Energix Renewable and Arad 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 Energix Renewable and Arad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energix Renewable Energies and Arad, you can compare the effects of market volatilities on Energix Renewable and Arad 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 Energix Renewable with a short position of Arad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energix Renewable and Arad.
Diversification Opportunities for Energix Renewable and Arad
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Energix and Arad is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Energix Renewable Energies and Arad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arad and Energix Renewable 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 Energix Renewable Energies are associated (or correlated) with Arad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arad has no effect on the direction of Energix Renewable i.e., Energix Renewable and Arad go up and down completely randomly.
Pair Corralation between Energix Renewable and Arad
Assuming the 90 days trading horizon Energix Renewable Energies is expected to under-perform the Arad. In addition to that, Energix Renewable is 2.33 times more volatile than Arad. It trades about -0.29 of its total potential returns per unit of risk. Arad is currently generating about 0.49 per unit of volatility. If you would invest 503,500 in Arad on August 25, 2024 and sell it today you would earn a total of 45,800 from holding Arad or generate 9.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energix Renewable Energies vs. Arad
Performance |
| Timeline |
| Energix Renewable |
| Arad |
Energix Renewable and Arad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energix Renewable and Arad
The main advantage of trading using opposite Energix Renewable and Arad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energix Renewable position performs unexpectedly, Arad 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 Arad will offset losses from the drop in Arad's long position.| Energix Renewable vs. Enlight Renewable Energy | Energix Renewable vs. Meshek Energy Renewable Energies | Energix Renewable vs. Ormat Technologies |
| Arad vs. Tower Semiconductor | Arad vs. Rimon Consulting Management | Arad vs. Migdal Insurance | Arad vs. Israel Discount Bank |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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