Correlation Between Gold Bond and Equital
Can any of the company-specific risk be diversified away by investing in both Gold Bond and Equital 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 Equital 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 Equital, you can compare the effects of market volatilities on Gold Bond and Equital 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 Equital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bond and Equital.
Diversification Opportunities for Gold Bond and Equital
Very poor diversification
The 3 months correlation between Gold and Equital is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding The Gold Bond and Equital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equital 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 Equital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equital has no effect on the direction of Gold Bond i.e., Gold Bond and Equital go up and down completely randomly.
Pair Corralation between Gold Bond and Equital
Assuming the 90 days trading horizon Gold Bond is expected to generate 1.72 times less return on investment than Equital. In addition to that, Gold Bond is 1.01 times more volatile than Equital. It trades about 0.28 of its total potential returns per unit of risk. Equital is currently generating about 0.48 per unit of volatility. If you would invest 1,303,000 in Equital on August 29, 2024 and sell it today you would earn a total of 184,000 from holding Equital or generate 14.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gold Bond vs. Equital
Performance |
| Timeline |
| Gold Bond |
| Equital |
Gold Bond and Equital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Bond and Equital
The main advantage of trading using opposite Gold Bond and Equital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bond position performs unexpectedly, Equital 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 Equital will offset losses from the drop in Equital'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 |
| Equital vs. Airport City | Equital vs. Naphtha | Equital vs. Menora Miv Hld | Equital 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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