Correlation Between Golan Plastic and Homebiogas
Can any of the company-specific risk be diversified away by investing in both Golan Plastic and Homebiogas 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 Homebiogas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golan Plastic and Homebiogas, you can compare the effects of market volatilities on Golan Plastic and Homebiogas 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 Homebiogas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golan Plastic and Homebiogas.
Diversification Opportunities for Golan Plastic and Homebiogas
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Golan and Homebiogas is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Golan Plastic and Homebiogas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homebiogas 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 Homebiogas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homebiogas has no effect on the direction of Golan Plastic i.e., Golan Plastic and Homebiogas go up and down completely randomly.
Pair Corralation between Golan Plastic and Homebiogas
Assuming the 90 days trading horizon Golan Plastic is expected to generate 0.72 times more return on investment than Homebiogas. However, Golan Plastic is 1.39 times less risky than Homebiogas. It trades about 0.39 of its potential returns per unit of risk. Homebiogas is currently generating about -0.46 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 Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golan Plastic vs. Homebiogas
Performance |
| Timeline |
| Golan Plastic |
| Homebiogas |
Golan Plastic and Homebiogas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golan Plastic and Homebiogas
The main advantage of trading using opposite Golan Plastic and Homebiogas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golan Plastic position performs unexpectedly, Homebiogas 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 Homebiogas will offset losses from the drop in Homebiogas' long position.| Golan Plastic vs. Arad | Golan Plastic vs. Alony Hetz Properties | Golan Plastic vs. Airport City | Golan Plastic vs. Harel Insurance Investments |
| Homebiogas vs. Migdal Insurance | Homebiogas vs. Clal Insurance Enterprises | Homebiogas vs. Veridis Environment | Homebiogas vs. ICL Israel Chemicals |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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