Correlation Between Hamama and Shufersal
Can any of the company-specific risk be diversified away by investing in both Hamama and Shufersal 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 Shufersal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamama and Shufersal, you can compare the effects of market volatilities on Hamama and Shufersal 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 Shufersal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamama and Shufersal.
Diversification Opportunities for Hamama and Shufersal
Excellent diversification
The 3 months correlation between Hamama and Shufersal is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hamama and Shufersal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shufersal 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 Shufersal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shufersal has no effect on the direction of Hamama i.e., Hamama and Shufersal go up and down completely randomly.
Pair Corralation between Hamama and Shufersal
Assuming the 90 days trading horizon Hamama is expected to under-perform the Shufersal. In addition to that, Hamama is 1.64 times more volatile than Shufersal. It trades about -0.07 of its total potential returns per unit of risk. Shufersal is currently generating about 0.21 per unit of volatility. If you would invest 315,600 in Shufersal on September 4, 2024 and sell it today you would earn a total of 43,400 from holding Shufersal or generate 13.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamama vs. Shufersal
Performance |
| Timeline |
| Hamama |
| Shufersal |
Hamama and Shufersal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamama and Shufersal
The main advantage of trading using opposite Hamama and Shufersal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamama position performs unexpectedly, Shufersal 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 Shufersal will offset losses from the drop in Shufersal's long position.The idea behind Hamama and Shufersal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Shufersal vs. Rami Levi | Shufersal vs. Bezeq Israeli Telecommunication | Shufersal vs. Bank Hapoalim | Shufersal vs. Bank Leumi Le Israel |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |