Correlation Between Golan Plastic and Neto ME
Can any of the company-specific risk be diversified away by investing in both Golan Plastic and Neto ME 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 Neto ME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golan Plastic and Neto ME Holdings, you can compare the effects of market volatilities on Golan Plastic and Neto ME 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 Neto ME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golan Plastic and Neto ME.
Diversification Opportunities for Golan Plastic and Neto ME
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Golan and Neto is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Golan Plastic and Neto ME Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neto ME Holdings 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 Neto ME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neto ME Holdings has no effect on the direction of Golan Plastic i.e., Golan Plastic and Neto ME go up and down completely randomly.
Pair Corralation between Golan Plastic and Neto ME
Assuming the 90 days trading horizon Golan Plastic is expected to generate 16.59 times less return on investment than Neto ME. But when comparing it to its historical volatility, Golan Plastic is 2.1 times less risky than Neto ME. It trades about 0.06 of its potential returns per unit of risk. Neto ME Holdings is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 1,145,000 in Neto ME Holdings on November 3, 2024 and sell it today you would earn a total of 284,000 from holding Neto ME Holdings or generate 24.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golan Plastic vs. Neto ME Holdings
Performance |
| Timeline |
| Golan Plastic |
| Neto ME Holdings |
Golan Plastic and Neto ME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golan Plastic and Neto ME
The main advantage of trading using opposite Golan Plastic and Neto ME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golan Plastic position performs unexpectedly, Neto ME 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 Neto ME will offset losses from the drop in Neto ME's long position.| Golan Plastic vs. Brimag L | Golan Plastic vs. Neto ME Holdings | Golan Plastic vs. Palram | Golan Plastic vs. Ludan Engineering Co |
| Neto ME vs. Delek Automotive Systems | Neto ME vs. Globrands Group | Neto ME vs. Kerur Holdings | Neto ME vs. Ram On Investments and |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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