Correlation Between Global Knafaim and NewMed Energy
Can any of the company-specific risk be diversified away by investing in both Global Knafaim 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 Global Knafaim and NewMed Energy 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 NewMed Energy , you can compare the effects of market volatilities on Global Knafaim 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 Global Knafaim with a short position of NewMed Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Knafaim and NewMed Energy.
Diversification Opportunities for Global Knafaim and NewMed Energy
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and NewMed is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Global Knafaim Leasing and NewMed Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewMed Energy 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 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 Global Knafaim i.e., Global Knafaim and NewMed Energy go up and down completely randomly.
Pair Corralation between Global Knafaim and NewMed Energy
Assuming the 90 days trading horizon Global Knafaim Leasing is expected to generate 1.18 times more return on investment than NewMed Energy. However, Global Knafaim is 1.18 times more volatile than NewMed Energy . It trades about 0.06 of its potential returns per unit of risk. NewMed Energy is currently generating about 0.06 per unit of risk. If you would invest 5,500 in Global Knafaim Leasing on November 27, 2024 and sell it today you would earn a total of 2,690 from holding Global Knafaim Leasing or generate 48.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Knafaim Leasing vs. NewMed Energy
Performance |
| Timeline |
| Global Knafaim Leasing |
| NewMed Energy |
Global Knafaim and NewMed Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Knafaim and NewMed Energy
The main advantage of trading using opposite Global Knafaim and NewMed Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Knafaim 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.| Global Knafaim vs. Knafaim | Global Knafaim vs. El Al Israel | Global Knafaim vs. Orbit Technologies | Global Knafaim vs. Ashot Ashkelon Industries |
| NewMed Energy vs. TAT Technologies | NewMed Energy vs. Sure Tech Investments LP | NewMed Energy vs. Unic tech Limited Partnership | NewMed Energy vs. Ormat Technologies |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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