Correlation Between Global Knafaim and Iargento
Can any of the company-specific risk be diversified away by investing in both Global Knafaim and Iargento 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 Iargento 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 Iargento Hi Tech, you can compare the effects of market volatilities on Global Knafaim and Iargento 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 Iargento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Knafaim and Iargento.
Diversification Opportunities for Global Knafaim and Iargento
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Iargento is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Global Knafaim Leasing and Iargento Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iargento Hi Tech 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 Iargento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iargento Hi Tech has no effect on the direction of Global Knafaim i.e., Global Knafaim and Iargento go up and down completely randomly.
Pair Corralation between Global Knafaim and Iargento
Assuming the 90 days trading horizon Global Knafaim Leasing is expected to under-perform the Iargento. But the stock apears to be less risky and, when comparing its historical volatility, Global Knafaim Leasing is 1.25 times less risky than Iargento. The stock trades about -0.16 of its potential returns per unit of risk. The Iargento Hi Tech is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 8,060 in Iargento Hi Tech on September 1, 2024 and sell it today you would earn a total of 560.00 from holding Iargento Hi Tech or generate 6.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Global Knafaim Leasing vs. Iargento Hi Tech
Performance |
| Timeline |
| Global Knafaim Leasing |
| Iargento Hi Tech |
Global Knafaim and Iargento Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Knafaim and Iargento
The main advantage of trading using opposite Global Knafaim and Iargento positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Knafaim position performs unexpectedly, Iargento 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 Iargento will offset losses from the drop in Iargento's long position.| Global Knafaim vs. Arad | Global Knafaim vs. Alony Hetz Properties | Global Knafaim vs. Airport City | Global Knafaim vs. Harel Insurance Investments |
| Iargento vs. Magic Software Enterprises | Iargento vs. ICL Israel Chemicals | Iargento vs. Scope Metals Group | Iargento vs. Israel China Biotechnology |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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