Correlation Between Golan Plastic and Inbar Group
Can any of the company-specific risk be diversified away by investing in both Golan Plastic and Inbar Group 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 Inbar Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golan Plastic and Inbar Group Finance, you can compare the effects of market volatilities on Golan Plastic and Inbar Group 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 Inbar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golan Plastic and Inbar Group.
Diversification Opportunities for Golan Plastic and Inbar Group
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golan and Inbar is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Golan Plastic and Inbar Group Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inbar Group Finance 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 Inbar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inbar Group Finance has no effect on the direction of Golan Plastic i.e., Golan Plastic and Inbar Group go up and down completely randomly.
Pair Corralation between Golan Plastic and Inbar Group
Assuming the 90 days trading horizon Golan Plastic is expected to generate 0.51 times more return on investment than Inbar Group. However, Golan Plastic is 1.96 times less risky than Inbar Group. It trades about 0.39 of its potential returns per unit of risk. Inbar Group Finance is currently generating about 0.18 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golan Plastic vs. Inbar Group Finance
Performance |
| Timeline |
| Golan Plastic |
| Inbar Group Finance |
Golan Plastic and Inbar Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golan Plastic and Inbar Group
The main advantage of trading using opposite Golan Plastic and Inbar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golan Plastic position performs unexpectedly, Inbar Group 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 Inbar Group will offset losses from the drop in Inbar Group's long position.| Golan Plastic vs. Arad | Golan Plastic vs. Alony Hetz Properties | Golan Plastic vs. Airport City | Golan Plastic vs. Harel Insurance Investments |
| Inbar Group vs. Golan Plastic | Inbar Group vs. Mobile Max M | Inbar Group vs. Millennium Food Tech LP | Inbar Group vs. Electreon Wireless |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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