Correlation Between Feat Fund and NewMed Energy
Can any of the company-specific risk be diversified away by investing in both Feat Fund 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 Feat Fund and NewMed Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Feat Fund Investments and NewMed Energy , you can compare the effects of market volatilities on Feat Fund 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 Feat Fund with a short position of NewMed Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feat Fund and NewMed Energy.
Diversification Opportunities for Feat Fund and NewMed Energy
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Feat and NewMed is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Feat Fund Investments and NewMed Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewMed Energy and Feat Fund 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 Feat Fund Investments 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 Feat Fund i.e., Feat Fund and NewMed Energy go up and down completely randomly.
Pair Corralation between Feat Fund and NewMed Energy
Assuming the 90 days trading horizon Feat Fund Investments is expected to under-perform the NewMed Energy. But the stock apears to be less risky and, when comparing its historical volatility, Feat Fund Investments is 2.05 times less risky than NewMed Energy. The stock trades about -0.24 of its potential returns per unit of risk. The NewMed Energy is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 108,880 in NewMed Energy on September 3, 2024 and sell it today you would earn a total of 3,920 from holding NewMed Energy or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Feat Fund Investments vs. NewMed Energy
Performance |
| Timeline |
| Feat Fund Investments |
| NewMed Energy |
Feat Fund and NewMed Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feat Fund and NewMed Energy
The main advantage of trading using opposite Feat Fund and NewMed Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feat Fund 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.| Feat Fund vs. Bezeq Israeli Telecommunication | Feat Fund vs. Arad Investment Industrial | Feat Fund vs. Hiron Trade Investments Industrial | Feat Fund vs. Imed Infinity Medical Limited |
| NewMed Energy vs. Feat Fund Investments | NewMed Energy vs. Tower Semiconductor | NewMed Energy vs. Aura Investments | NewMed Energy vs. Rapac Communication Infrastructure |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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