Correlation Between GODM Investments and Cellcom Israel
Can any of the company-specific risk be diversified away by investing in both GODM Investments and Cellcom Israel 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 GODM Investments and Cellcom Israel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GODM Investments and Cellcom Israel, you can compare the effects of market volatilities on GODM Investments and Cellcom Israel 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 GODM Investments with a short position of Cellcom Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of GODM Investments and Cellcom Israel.
Diversification Opportunities for GODM Investments and Cellcom Israel
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GODM and Cellcom is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding GODM Investments and Cellcom Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellcom Israel and GODM Investments 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 GODM Investments are associated (or correlated) with Cellcom Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellcom Israel has no effect on the direction of GODM Investments i.e., GODM Investments and Cellcom Israel go up and down completely randomly.
Pair Corralation between GODM Investments and Cellcom Israel
Assuming the 90 days trading horizon GODM Investments is expected to under-perform the Cellcom Israel. But the stock apears to be less risky and, when comparing its historical volatility, GODM Investments is 1.45 times less risky than Cellcom Israel. The stock trades about -0.47 of its potential returns per unit of risk. The Cellcom Israel is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 171,500 in Cellcom Israel on September 12, 2024 and sell it today you would earn a total of 33,900 from holding Cellcom Israel or generate 19.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GODM Investments vs. Cellcom Israel
Performance |
| Timeline |
| GODM Investments |
| Cellcom Israel |
GODM Investments and Cellcom Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GODM Investments and Cellcom Israel
The main advantage of trading using opposite GODM Investments and Cellcom Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GODM Investments position performs unexpectedly, Cellcom Israel 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 Cellcom Israel will offset losses from the drop in Cellcom Israel's long position.| GODM Investments vs. Bank Hapoalim | GODM Investments vs. Israel Discount Bank | GODM Investments vs. Mizrahi Tefahot | GODM Investments vs. Bezeq Israeli Telecommunication |
| Cellcom Israel vs. Ormat Technologies | Cellcom Israel vs. ICL Israel Chemicals | Cellcom Israel vs. Technoplus Ventures | Cellcom Israel vs. TAT Technologies |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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