Correlation Between Golan Plastic and Gan Shmuel
Can any of the company-specific risk be diversified away by investing in both Golan Plastic and Gan Shmuel 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 Golan Plastic and Gan Shmuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golan Plastic and Gan Shmuel, you can compare the effects of market volatilities on Golan Plastic and Gan Shmuel 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 Golan Plastic with a short position of Gan Shmuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golan Plastic and Gan Shmuel.
Diversification Opportunities for Golan Plastic and Gan Shmuel
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golan and Gan is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Golan Plastic and Gan Shmuel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan Shmuel and Golan Plastic 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 Golan Plastic are associated (or correlated) with Gan Shmuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan Shmuel has no effect on the direction of Golan Plastic i.e., Golan Plastic and Gan Shmuel go up and down completely randomly.
Pair Corralation between Golan Plastic and Gan Shmuel
Assuming the 90 days trading horizon Golan Plastic is expected to generate 1.53 times more return on investment than Gan Shmuel. However, Golan Plastic is 1.53 times more volatile than Gan Shmuel. It trades about 0.39 of its potential returns per unit of risk. Gan Shmuel is currently generating about 0.14 per unit of risk. If you would invest 99,000 in Golan Plastic on September 1, 2024 and sell it today you would earn a total of 19,000 from holding Golan Plastic or generate 19.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golan Plastic vs. Gan Shmuel
Performance |
| Timeline |
| Golan Plastic |
| Gan Shmuel |
Golan Plastic and Gan Shmuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golan Plastic and Gan Shmuel
The main advantage of trading using opposite Golan Plastic and Gan Shmuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golan Plastic position performs unexpectedly, Gan Shmuel 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 Gan Shmuel will offset losses from the drop in Gan Shmuel's long position.| Golan Plastic vs. Arad | Golan Plastic vs. Alony Hetz Properties | Golan Plastic vs. Airport City | Golan Plastic vs. Harel Insurance Investments |
| Gan Shmuel vs. Kerur Holdings | Gan Shmuel vs. Sano Brunos Enterprises | Gan Shmuel vs. Al Bad Massuot Yitzhak |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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