Correlation Between Gold Bond and Lahav LR
Can any of the company-specific risk be diversified away by investing in both Gold Bond and Lahav LR 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 Lahav LR 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 Lahav LR Real, you can compare the effects of market volatilities on Gold Bond and Lahav LR 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 Lahav LR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bond and Lahav LR.
Diversification Opportunities for Gold Bond and Lahav LR
Poor diversification
The 3 months correlation between Gold and Lahav is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding The Gold Bond and Lahav LR Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lahav LR Real 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 Lahav LR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lahav LR Real has no effect on the direction of Gold Bond i.e., Gold Bond and Lahav LR go up and down completely randomly.
Pair Corralation between Gold Bond and Lahav LR
Assuming the 90 days trading horizon Gold Bond is expected to generate 3.59 times less return on investment than Lahav LR. But when comparing it to its historical volatility, The Gold Bond is 1.35 times less risky than Lahav LR. It trades about 0.2 of its potential returns per unit of risk. Lahav LR Real is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest 38,550 in Lahav LR Real on September 4, 2024 and sell it today you would earn a total of 7,740 from holding Lahav LR Real or generate 20.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gold Bond vs. Lahav LR Real
Performance |
| Timeline |
| Gold Bond |
| Lahav LR Real |
Gold Bond and Lahav LR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Bond and Lahav LR
The main advantage of trading using opposite Gold Bond and Lahav LR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bond position performs unexpectedly, Lahav LR 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 Lahav LR will offset losses from the drop in Lahav LR'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 |
| Lahav LR vs. Nextage Therapeutics | Lahav LR vs. Israel China Biotechnology | Lahav LR vs. The Gold Bond | Lahav LR vs. Overseas Commerce |
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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