Correlation Between Fattal 1998 and Lahav LR
Can any of the company-specific risk be diversified away by investing in both Fattal 1998 and Lahav LR 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 Fattal 1998 and Lahav LR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fattal 1998 Holdings and Lahav LR Real, you can compare the effects of market volatilities on Fattal 1998 and Lahav LR 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 Fattal 1998 with a short position of Lahav LR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fattal 1998 and Lahav LR.
Diversification Opportunities for Fattal 1998 and Lahav LR
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fattal and Lahav is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fattal 1998 Holdings and Lahav LR Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lahav LR Real and Fattal 1998 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 Fattal 1998 Holdings are associated (or correlated) with Lahav LR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lahav LR Real has no effect on the direction of Fattal 1998 i.e., Fattal 1998 and Lahav LR go up and down completely randomly.
Pair Corralation between Fattal 1998 and Lahav LR
Assuming the 90 days trading horizon Fattal 1998 is expected to generate 1.73 times less return on investment than Lahav LR. But when comparing it to its historical volatility, Fattal 1998 Holdings is 1.04 times less risky than Lahav LR. It trades about 0.34 of its potential returns per unit of risk. Lahav LR Real is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest 37,890 in Lahav LR Real on September 1, 2024 and sell it today you would earn a total of 8,020 from holding Lahav LR Real or generate 21.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fattal 1998 Holdings vs. Lahav LR Real
Performance |
| Timeline |
| Fattal 1998 Holdings |
| Lahav LR Real |
Fattal 1998 and Lahav LR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fattal 1998 and Lahav LR
The main advantage of trading using opposite Fattal 1998 and Lahav LR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fattal 1998 position performs unexpectedly, Lahav LR 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 Lahav LR will offset losses from the drop in Lahav LR's long position.| Fattal 1998 vs. Delek Group | Fattal 1998 vs. El Al Israel | Fattal 1998 vs. Bank Leumi Le Israel | Fattal 1998 vs. Azrieli Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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