Correlation Between Gold Bond and Arena Star
Can any of the company-specific risk be diversified away by investing in both Gold Bond and Arena Star 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 Gold Bond and Arena Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gold Bond and Arena Star Group, you can compare the effects of market volatilities on Gold Bond and Arena Star 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 Gold Bond with a short position of Arena Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bond and Arena Star.
Diversification Opportunities for Gold Bond and Arena Star
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gold and Arena is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding The Gold Bond and Arena Star Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Star Group and Gold Bond 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 The Gold Bond are associated (or correlated) with Arena Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Star Group has no effect on the direction of Gold Bond i.e., Gold Bond and Arena Star go up and down completely randomly.
Pair Corralation between Gold Bond and Arena Star
Assuming the 90 days trading horizon Gold Bond is expected to generate 57.95 times less return on investment than Arena Star. But when comparing it to its historical volatility, The Gold Bond is 1.9 times less risky than Arena Star. It trades about 0.01 of its potential returns per unit of risk. Arena Star Group is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 20,580 in Arena Star Group on September 12, 2024 and sell it today you would earn a total of 2,850 from holding Arena Star Group or generate 13.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gold Bond vs. Arena Star Group
Performance |
| Timeline |
| Gold Bond |
| Arena Star Group |
Gold Bond and Arena Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Bond and Arena Star
The main advantage of trading using opposite Gold Bond and Arena Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bond position performs unexpectedly, Arena Star 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 Arena Star will offset losses from the drop in Arena Star's long position.| Gold Bond vs. Big Shopping Centers | Gold Bond vs. Al Bad Massuot Yitzhak | Gold Bond vs. Harel Insurance Investments | Gold Bond vs. Palram |
| Arena Star vs. Isras Investment | Arena Star vs. Sella Real Estate | Arena Star vs. Harel Insurance Investments | Arena Star vs. B Communications |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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