Correlation Between Global Knafaim and Millennium Food
Can any of the company-specific risk be diversified away by investing in both Global Knafaim and Millennium Food 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 Millennium Food 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 Millennium Food Tech LP, you can compare the effects of market volatilities on Global Knafaim and Millennium Food 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 Millennium Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Knafaim and Millennium Food.
Diversification Opportunities for Global Knafaim and Millennium Food
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Millennium is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Global Knafaim Leasing and Millennium Food Tech LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millennium Food 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 Millennium Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millennium Food Tech has no effect on the direction of Global Knafaim i.e., Global Knafaim and Millennium Food go up and down completely randomly.
Pair Corralation between Global Knafaim and Millennium Food
Assuming the 90 days trading horizon Global Knafaim Leasing is expected to under-perform the Millennium Food. But the stock apears to be less risky and, when comparing its historical volatility, Global Knafaim Leasing is 1.05 times less risky than Millennium Food. The stock trades about -0.17 of its potential returns per unit of risk. The Millennium Food Tech LP is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 19,180 in Millennium Food Tech LP on August 30, 2024 and sell it today you would lose (1,160) from holding Millennium Food Tech LP or give up 6.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Global Knafaim Leasing vs. Millennium Food Tech LP
Performance |
| Timeline |
| Global Knafaim Leasing |
| Millennium Food Tech |
Global Knafaim and Millennium Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Knafaim and Millennium Food
The main advantage of trading using opposite Global Knafaim and Millennium Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Knafaim position performs unexpectedly, Millennium Food 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 Millennium Food will offset losses from the drop in Millennium Food's long position.| Global Knafaim vs. Ormat Technologies | Global Knafaim vs. Multi Retail Group | Global Knafaim vs. Nova | Global Knafaim vs. B Communications |
| Millennium Food vs. Willy Food | Millennium Food vs. B Communications | Millennium Food vs. Nova | Millennium Food vs. Petrochemical |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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