Correlation Between Global Knafaim and Computer Direct
Can any of the company-specific risk be diversified away by investing in both Global Knafaim and Computer Direct 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 Global Knafaim and Computer Direct into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Knafaim Leasing and Computer Direct, you can compare the effects of market volatilities on Global Knafaim and Computer Direct 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 Global Knafaim with a short position of Computer Direct. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Knafaim and Computer Direct.
Diversification Opportunities for Global Knafaim and Computer Direct
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Computer is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Global Knafaim Leasing and Computer Direct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Direct and Global Knafaim 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 Global Knafaim Leasing are associated (or correlated) with Computer Direct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Direct has no effect on the direction of Global Knafaim i.e., Global Knafaim and Computer Direct go up and down completely randomly.
Pair Corralation between Global Knafaim and Computer Direct
Assuming the 90 days trading horizon Global Knafaim Leasing is expected to under-perform the Computer Direct. But the stock apears to be less risky and, when comparing its historical volatility, Global Knafaim Leasing is 1.09 times less risky than Computer Direct. The stock trades about -0.16 of its potential returns per unit of risk. The Computer Direct is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,695,000 in Computer Direct on November 27, 2024 and sell it today you would earn a total of 236,000 from holding Computer Direct or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Knafaim Leasing vs. Computer Direct
Performance |
| Timeline |
| Global Knafaim Leasing |
| Computer Direct |
Global Knafaim and Computer Direct Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Knafaim and Computer Direct
The main advantage of trading using opposite Global Knafaim and Computer Direct positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Knafaim position performs unexpectedly, Computer Direct 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 Computer Direct will offset losses from the drop in Computer Direct's long position.| Global Knafaim vs. Knafaim | Global Knafaim vs. El Al Israel | Global Knafaim vs. Orbit Technologies | Global Knafaim vs. Ashot Ashkelon Industries |
| Computer Direct vs. Matrix | Computer Direct vs. Hilan | Computer Direct vs. One Software Technologies | Computer Direct vs. Atreyu Capital Markets |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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