Correlation Between Global Knafaim and Tower Semiconductor
Can any of the company-specific risk be diversified away by investing in both Global Knafaim and Tower Semiconductor 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 Tower Semiconductor 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 Tower Semiconductor, you can compare the effects of market volatilities on Global Knafaim and Tower Semiconductor 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 Tower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Knafaim and Tower Semiconductor.
Diversification Opportunities for Global Knafaim and Tower Semiconductor
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Tower is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Global Knafaim Leasing and Tower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower Semiconductor 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 Tower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower Semiconductor has no effect on the direction of Global Knafaim i.e., Global Knafaim and Tower Semiconductor go up and down completely randomly.
Pair Corralation between Global Knafaim and Tower Semiconductor
Assuming the 90 days trading horizon Global Knafaim Leasing is expected to under-perform the Tower Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Global Knafaim Leasing is 1.86 times less risky than Tower Semiconductor. The stock trades about -0.16 of its potential returns per unit of risk. The Tower Semiconductor is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,571,000 in Tower Semiconductor on September 1, 2024 and sell it today you would earn a total of 114,000 from holding Tower Semiconductor or generate 7.26% 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. Tower Semiconductor
Performance |
| Timeline |
| Global Knafaim Leasing |
| Tower Semiconductor |
Global Knafaim and Tower Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Knafaim and Tower Semiconductor
The main advantage of trading using opposite Global Knafaim and Tower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Knafaim position performs unexpectedly, Tower Semiconductor 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 Tower Semiconductor will offset losses from the drop in Tower Semiconductor's long position.| Global Knafaim vs. Arad | Global Knafaim vs. Alony Hetz Properties | Global Knafaim vs. Airport City | Global Knafaim vs. Harel Insurance Investments |
| Tower Semiconductor vs. Palram | Tower Semiconductor vs. Shagrir Group Vehicle | Tower Semiconductor vs. EN Shoham Business | Tower Semiconductor vs. Shufersal |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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