Correlation Between Gan Shmuel and Rami Levi
Can any of the company-specific risk be diversified away by investing in both Gan Shmuel and Rami Levi 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 Rami Levi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gan Shmuel and Rami Levi, you can compare the effects of market volatilities on Gan Shmuel and Rami Levi 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 Rami Levi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gan Shmuel and Rami Levi.
Diversification Opportunities for Gan Shmuel and Rami Levi
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gan and Rami is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Gan Shmuel and Rami Levi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rami Levi 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 Rami Levi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rami Levi has no effect on the direction of Gan Shmuel i.e., Gan Shmuel and Rami Levi go up and down completely randomly.
Pair Corralation between Gan Shmuel and Rami Levi
Assuming the 90 days trading horizon Gan Shmuel is expected to generate 1.31 times less return on investment than Rami Levi. In addition to that, Gan Shmuel is 1.01 times more volatile than Rami Levi. It trades about 0.24 of its total potential returns per unit of risk. Rami Levi is currently generating about 0.32 per unit of volatility. If you would invest 2,231,220 in Rami Levi on September 13, 2024 and sell it today you would earn a total of 216,780 from holding Rami Levi or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gan Shmuel vs. Rami Levi
Performance |
| Timeline |
| Gan Shmuel |
| Rami Levi |
Gan Shmuel and Rami Levi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gan Shmuel and Rami Levi
The main advantage of trading using opposite Gan Shmuel and Rami Levi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gan Shmuel position performs unexpectedly, Rami Levi 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 Rami Levi will offset losses from the drop in Rami Levi's 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 |
| Rami Levi vs. Shufersal | Rami Levi vs. Bank Leumi Le Israel | Rami Levi vs. Bezeq Israeli Telecommunication | Rami Levi vs. Bank Hapoalim |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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