Correlation Between Knafaim and Spring Ventures
Can any of the company-specific risk be diversified away by investing in both Knafaim and Spring Ventures 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 Knafaim and Spring Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knafaim and Spring Ventures, you can compare the effects of market volatilities on Knafaim and Spring Ventures 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 Knafaim with a short position of Spring Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knafaim and Spring Ventures.
Diversification Opportunities for Knafaim and Spring Ventures
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Knafaim and Spring is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Knafaim and Spring Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Ventures and Knafaim 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 Knafaim are associated (or correlated) with Spring Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spring Ventures has no effect on the direction of Knafaim i.e., Knafaim and Spring Ventures go up and down completely randomly.
Pair Corralation between Knafaim and Spring Ventures
Assuming the 90 days trading horizon Knafaim is expected to generate 0.64 times more return on investment than Spring Ventures. However, Knafaim is 1.56 times less risky than Spring Ventures. It trades about 0.11 of its potential returns per unit of risk. Spring Ventures is currently generating about 0.04 per unit of risk. If you would invest 97,753 in Knafaim on September 1, 2024 and sell it today you would earn a total of 39,747 from holding Knafaim or generate 40.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knafaim vs. Spring Ventures
Performance |
| Timeline |
| Knafaim |
| Spring Ventures |
Knafaim and Spring Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knafaim and Spring Ventures
The main advantage of trading using opposite Knafaim and Spring Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knafaim position performs unexpectedly, Spring Ventures 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 Spring Ventures will offset losses from the drop in Spring Ventures' long position.| Knafaim vs. El Al Israel | Knafaim vs. Melisron | Knafaim vs. Global Knafaim Leasing | Knafaim vs. Bezeq Israeli Telecommunication |
| Spring Ventures vs. Capital Point | Spring Ventures vs. Mivtach Shamir | Spring Ventures vs. Fattal 1998 Holdings | Spring Ventures vs. Atreyu Capital Markets |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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