Correlation Between Hod Assaf and Edri El
Can any of the company-specific risk be diversified away by investing in both Hod Assaf and Edri El 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 Hod Assaf and Edri El into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hod Assaf Industries and Edri El, you can compare the effects of market volatilities on Hod Assaf and Edri El 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 Hod Assaf with a short position of Edri El. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hod Assaf and Edri El.
Diversification Opportunities for Hod Assaf and Edri El
Very good diversification
The 3 months correlation between Hod and Edri is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hod Assaf Industries and Edri El in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edri El and Hod Assaf 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 Hod Assaf Industries are associated (or correlated) with Edri El. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edri El has no effect on the direction of Hod Assaf i.e., Hod Assaf and Edri El go up and down completely randomly.
Pair Corralation between Hod Assaf and Edri El
Assuming the 90 days trading horizon Hod Assaf Industries is expected to generate 0.47 times more return on investment than Edri El. However, Hod Assaf Industries is 2.14 times less risky than Edri El. It trades about 0.13 of its potential returns per unit of risk. Edri El is currently generating about -0.05 per unit of risk. If you would invest 379,400 in Hod Assaf Industries on September 13, 2024 and sell it today you would earn a total of 125,000 from holding Hod Assaf Industries or generate 32.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hod Assaf Industries vs. Edri El
Performance |
| Timeline |
| Hod Assaf Industries |
| Edri El |
Hod Assaf and Edri El Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hod Assaf and Edri El
The main advantage of trading using opposite Hod Assaf and Edri El positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hod Assaf position performs unexpectedly, Edri El 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 Edri El will offset losses from the drop in Edri El's long position.| Hod Assaf vs. Elbit Systems | Hod Assaf vs. Bezeq Israeli Telecommunication | Hod Assaf vs. Bank Hapoalim | Hod Assaf vs. Teva Pharmaceutical Industries |
| Edri El vs. Electreon Wireless | Edri El vs. Scope Metals Group | Edri El vs. Meitav Dash Investments | Edri El vs. Israel China Biotechnology |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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