Correlation Between Global Knafaim and Netz Hotels
Can any of the company-specific risk be diversified away by investing in both Global Knafaim and Netz Hotels 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 Netz Hotels 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 Netz Hotels, you can compare the effects of market volatilities on Global Knafaim and Netz Hotels 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 Netz Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Knafaim and Netz Hotels.
Diversification Opportunities for Global Knafaim and Netz Hotels
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and Netz is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Global Knafaim Leasing and Netz Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netz Hotels 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 Netz Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netz Hotels has no effect on the direction of Global Knafaim i.e., Global Knafaim and Netz Hotels go up and down completely randomly.
Pair Corralation between Global Knafaim and Netz Hotels
Assuming the 90 days trading horizon Global Knafaim Leasing is expected to under-perform the Netz Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Global Knafaim Leasing is 1.72 times less risky than Netz Hotels. The stock trades about -0.17 of its potential returns per unit of risk. The Netz Hotels is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 2,720 in Netz Hotels on August 29, 2024 and sell it today you would earn a total of 690.00 from holding Netz Hotels or generate 25.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Knafaim Leasing vs. Netz Hotels
Performance |
| Timeline |
| Global Knafaim Leasing |
| Netz Hotels |
Global Knafaim and Netz Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Knafaim and Netz Hotels
The main advantage of trading using opposite Global Knafaim and Netz Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Knafaim position performs unexpectedly, Netz Hotels 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 Netz Hotels will offset losses from the drop in Netz Hotels' long position.| Global Knafaim vs. Knafaim | Global Knafaim vs. El Al Israel | Global Knafaim vs. Orbit Technologies | Global Knafaim vs. Ashot Ashkelon Industries |
| Netz Hotels vs. Direct Capital Investments | Netz Hotels vs. Itay Financial AA | Netz Hotels vs. B Communications | Netz Hotels vs. Holmes Place International |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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