Correlation Between Homebiogas and Golan Plastic
Can any of the company-specific risk be diversified away by investing in both Homebiogas and Golan Plastic 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 Homebiogas and Golan Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homebiogas and Golan Plastic, you can compare the effects of market volatilities on Homebiogas and Golan Plastic 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 Homebiogas with a short position of Golan Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homebiogas and Golan Plastic.
Diversification Opportunities for Homebiogas and Golan Plastic
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Homebiogas and Golan is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Homebiogas and Golan Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golan Plastic and Homebiogas 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 Homebiogas are associated (or correlated) with Golan Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golan Plastic has no effect on the direction of Homebiogas i.e., Homebiogas and Golan Plastic go up and down completely randomly.
Pair Corralation between Homebiogas and Golan Plastic
Assuming the 90 days trading horizon Homebiogas is expected to under-perform the Golan Plastic. In addition to that, Homebiogas is 1.39 times more volatile than Golan Plastic. It trades about -0.46 of its total potential returns per unit of risk. Golan Plastic is currently generating about 0.39 per unit of volatility. If you would invest 99,000 in Golan Plastic on September 1, 2024 and sell it today you would earn a total of 19,000 from holding Golan Plastic or generate 19.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Homebiogas vs. Golan Plastic
Performance |
| Timeline |
| Homebiogas |
| Golan Plastic |
Homebiogas and Golan Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homebiogas and Golan Plastic
The main advantage of trading using opposite Homebiogas and Golan Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homebiogas position performs unexpectedly, Golan Plastic 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 Golan Plastic will offset losses from the drop in Golan Plastic's long position.| Homebiogas vs. Migdal Insurance | Homebiogas vs. Clal Insurance Enterprises | Homebiogas vs. Veridis Environment | Homebiogas vs. ICL Israel Chemicals |
| Golan Plastic vs. Arad | Golan Plastic vs. Alony Hetz Properties | Golan Plastic vs. Airport City | Golan Plastic vs. Harel Insurance 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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