Correlation Between Equital and GFC Green
Can any of the company-specific risk be diversified away by investing in both Equital and GFC Green 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 Equital and GFC Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equital and GFC Green Fields, you can compare the effects of market volatilities on Equital and GFC Green 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 Equital with a short position of GFC Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equital and GFC Green.
Diversification Opportunities for Equital and GFC Green
Pay attention - limited upside
The 3 months correlation between Equital and GFC is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Equital and GFC Green Fields in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFC Green Fields and Equital 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 Equital are associated (or correlated) with GFC Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFC Green Fields has no effect on the direction of Equital i.e., Equital and GFC Green go up and down completely randomly.
Pair Corralation between Equital and GFC Green
Assuming the 90 days trading horizon Equital is expected to generate 1.13 times more return on investment than GFC Green. However, Equital is 1.13 times more volatile than GFC Green Fields. It trades about 0.05 of its potential returns per unit of risk. GFC Green Fields is currently generating about 0.03 per unit of risk. If you would invest 1,041,000 in Equital on August 30, 2024 and sell it today you would earn a total of 439,000 from holding Equital or generate 42.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.48% |
| Values | Daily Returns |
Equital vs. GFC Green Fields
Performance |
| Timeline |
| Equital |
| GFC Green Fields |
Equital and GFC Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equital and GFC Green
The main advantage of trading using opposite Equital and GFC Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equital position performs unexpectedly, GFC Green 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 GFC Green will offset losses from the drop in GFC Green's long position.| Equital vs. Airport City | Equital vs. Naphtha | Equital vs. Menora Miv Hld | Equital vs. Delek Automotive Systems |
| GFC Green vs. Clal Insurance Enterprises | GFC Green vs. Israel China Biotechnology | GFC Green vs. IDI Insurance | GFC Green vs. YH Dimri Construction |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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