Correlation Between Gan Shmuel and Nextferm Technologies
Can any of the company-specific risk be diversified away by investing in both Gan Shmuel and Nextferm Technologies 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 Gan Shmuel and Nextferm Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gan Shmuel and Nextferm Technologies, you can compare the effects of market volatilities on Gan Shmuel and Nextferm Technologies 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 Gan Shmuel with a short position of Nextferm Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gan Shmuel and Nextferm Technologies.
Diversification Opportunities for Gan Shmuel and Nextferm Technologies
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gan and Nextferm is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Gan Shmuel and Nextferm Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextferm Technologies and Gan Shmuel 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 Gan Shmuel are associated (or correlated) with Nextferm Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextferm Technologies has no effect on the direction of Gan Shmuel i.e., Gan Shmuel and Nextferm Technologies go up and down completely randomly.
Pair Corralation between Gan Shmuel and Nextferm Technologies
Assuming the 90 days trading horizon Gan Shmuel is expected to under-perform the Nextferm Technologies. In addition to that, Gan Shmuel is 1.16 times more volatile than Nextferm Technologies. It trades about -0.35 of its total potential returns per unit of risk. Nextferm Technologies is currently generating about -0.15 per unit of volatility. If you would invest 17,850 in Nextferm Technologies on December 1, 2024 and sell it today you would lose (1,260) from holding Nextferm Technologies or give up 7.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Gan Shmuel vs. Nextferm Technologies
Performance |
| Timeline |
| Gan Shmuel |
| Nextferm Technologies |
Gan Shmuel and Nextferm Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gan Shmuel and Nextferm Technologies
The main advantage of trading using opposite Gan Shmuel and Nextferm Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gan Shmuel position performs unexpectedly, Nextferm Technologies 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 Nextferm Technologies will offset losses from the drop in Nextferm Technologies' long position.| Gan Shmuel vs. Neto ME Holdings | Gan Shmuel vs. Kerur Holdings | Gan Shmuel vs. Salomon A Angel | Gan Shmuel vs. Sano Brunos Enterprises |
| Nextferm Technologies vs. Priortech | Nextferm Technologies vs. Unic tech Limited Partnership | Nextferm Technologies vs. Skyline Investments | Nextferm Technologies vs. Amot Investments |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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