Correlation Between Kafrit and Creative Media
Can any of the company-specific risk be diversified away by investing in both Kafrit and Creative Media 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 Kafrit and Creative Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kafrit and Creative Media Community, you can compare the effects of market volatilities on Kafrit and Creative Media 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 Kafrit with a short position of Creative Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kafrit and Creative Media.
Diversification Opportunities for Kafrit and Creative Media
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kafrit and Creative is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kafrit and Creative Media Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creative Media Community and Kafrit 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 Kafrit are associated (or correlated) with Creative Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creative Media Community has no effect on the direction of Kafrit i.e., Kafrit and Creative Media go up and down completely randomly.
Pair Corralation between Kafrit and Creative Media
Assuming the 90 days trading horizon Kafrit is expected to generate 0.44 times more return on investment than Creative Media. However, Kafrit is 2.27 times less risky than Creative Media. It trades about 0.03 of its potential returns per unit of risk. Creative Media Community is currently generating about -0.61 per unit of risk. If you would invest 265,800 in Kafrit on September 1, 2024 and sell it today you would earn a total of 2,700 from holding Kafrit or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kafrit vs. Creative Media Community
Performance |
| Timeline |
| Kafrit |
| Creative Media Community |
Kafrit and Creative Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kafrit and Creative Media
The main advantage of trading using opposite Kafrit and Creative Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kafrit position performs unexpectedly, Creative Media 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 Creative Media will offset losses from the drop in Creative Media's long position.The idea behind Kafrit and Creative Media Community 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.| Creative Media vs. Nice | Creative Media vs. The Gold Bond | Creative Media vs. Bank Leumi Le Israel | Creative Media vs. ICL Israel Chemicals |
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 CEOs Directory module to screen CEOs from public companies around the world.
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