Correlation Between Intercure and E M
Can any of the company-specific risk be diversified away by investing in both Intercure and E M 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 Intercure and E M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intercure and E M Computing, you can compare the effects of market volatilities on Intercure and E M 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 Intercure with a short position of E M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intercure and E M.
Diversification Opportunities for Intercure and E M
Very weak diversification
The 3 months correlation between Intercure and EMCO is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Intercure and E M Computing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E M Computing and Intercure 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 Intercure are associated (or correlated) with E M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E M Computing has no effect on the direction of Intercure i.e., Intercure and E M go up and down completely randomly.
Pair Corralation between Intercure and E M
Assuming the 90 days trading horizon Intercure is expected to under-perform the E M. In addition to that, Intercure is 1.67 times more volatile than E M Computing. It trades about -0.41 of its total potential returns per unit of risk. E M Computing is currently generating about 0.33 per unit of volatility. If you would invest 80,800 in E M Computing on August 30, 2024 and sell it today you would earn a total of 11,000 from holding E M Computing or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Intercure vs. E M Computing
Performance |
| Timeline |
| Intercure |
| E M Computing |
Intercure and E M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intercure and E M
The main advantage of trading using opposite Intercure and E M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intercure position performs unexpectedly, E M 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 E M will offset losses from the drop in E M's long position.| Intercure vs. Together Startup Network | Intercure vs. Delek Group | Intercure vs. Teva Pharmaceutical Industries | Intercure vs. El Al 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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