Correlation Between Golan Plastic and Ralco Agencies
Can any of the company-specific risk be diversified away by investing in both Golan Plastic and Ralco Agencies 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 Ralco Agencies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golan Plastic and Ralco Agencies, you can compare the effects of market volatilities on Golan Plastic and Ralco Agencies 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 Ralco Agencies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golan Plastic and Ralco Agencies.
Diversification Opportunities for Golan Plastic and Ralco Agencies
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Golan and Ralco is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Golan Plastic and Ralco Agencies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ralco Agencies 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 Ralco Agencies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ralco Agencies has no effect on the direction of Golan Plastic i.e., Golan Plastic and Ralco Agencies go up and down completely randomly.
Pair Corralation between Golan Plastic and Ralco Agencies
Assuming the 90 days trading horizon Golan Plastic is expected to generate 5.72 times less return on investment than Ralco Agencies. But when comparing it to its historical volatility, Golan Plastic is 1.44 times less risky than Ralco Agencies. It trades about 0.06 of its potential returns per unit of risk. Ralco Agencies is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 470,200 in Ralco Agencies on November 3, 2024 and sell it today you would earn a total of 37,000 from holding Ralco Agencies or generate 7.87% 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. Ralco Agencies
Performance |
| Timeline |
| Golan Plastic |
| Ralco Agencies |
Golan Plastic and Ralco Agencies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golan Plastic and Ralco Agencies
The main advantage of trading using opposite Golan Plastic and Ralco Agencies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golan Plastic position performs unexpectedly, Ralco Agencies 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 Ralco Agencies will offset losses from the drop in Ralco Agencies' long position.| Golan Plastic vs. Brimag L | Golan Plastic vs. Neto ME Holdings | Golan Plastic vs. Palram | Golan Plastic vs. Ludan Engineering Co |
| Ralco Agencies vs. Brimag L | Ralco Agencies vs. Neto ME Holdings | Ralco Agencies vs. Qualitau | Ralco Agencies vs. Delek Automotive Systems |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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