Correlation Between Hamama and Retailors
Can any of the company-specific risk be diversified away by investing in both Hamama and Retailors 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 Hamama and Retailors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamama and Retailors, you can compare the effects of market volatilities on Hamama and Retailors 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 Hamama with a short position of Retailors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamama and Retailors.
Diversification Opportunities for Hamama and Retailors
Very good diversification
The 3 months correlation between Hamama and Retailors is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hamama and Retailors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retailors and Hamama 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 Hamama are associated (or correlated) with Retailors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retailors has no effect on the direction of Hamama i.e., Hamama and Retailors go up and down completely randomly.
Pair Corralation between Hamama and Retailors
Assuming the 90 days trading horizon Hamama is expected to under-perform the Retailors. But the stock apears to be less risky and, when comparing its historical volatility, Hamama is 1.34 times less risky than Retailors. The stock trades about -0.22 of its potential returns per unit of risk. The Retailors is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 671,700 in Retailors on November 29, 2024 and sell it today you would earn a total of 190,000 from holding Retailors or generate 28.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamama vs. Retailors
Performance |
| Timeline |
| Hamama |
| Retailors |
Hamama and Retailors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamama and Retailors
The main advantage of trading using opposite Hamama and Retailors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamama position performs unexpectedly, Retailors 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 Retailors will offset losses from the drop in Retailors' long position.| Hamama vs. Imed Infinity Medical Limited | Hamama vs. Epitomee Medical | Hamama vs. Victory Supermarket Chain | Hamama vs. Electreon Wireless |
| Retailors vs. Fox Wizel | Retailors vs. Terminal X Online | Retailors vs. Shufersal | Retailors vs. Israel Canada |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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