Correlation Between Levinstein Eng and Arad
Can any of the company-specific risk be diversified away by investing in both Levinstein Eng and Arad 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 Levinstein Eng and Arad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Levinstein Eng and Arad, you can compare the effects of market volatilities on Levinstein Eng and Arad 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 Levinstein Eng with a short position of Arad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levinstein Eng and Arad.
Diversification Opportunities for Levinstein Eng and Arad
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Levinstein and Arad is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Levinstein Eng and Arad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arad and Levinstein Eng 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 Levinstein Eng are associated (or correlated) with Arad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arad has no effect on the direction of Levinstein Eng i.e., Levinstein Eng and Arad go up and down completely randomly.
Pair Corralation between Levinstein Eng and Arad
Assuming the 90 days trading horizon Levinstein Eng is expected to generate 0.81 times more return on investment than Arad. However, Levinstein Eng is 1.24 times less risky than Arad. It trades about 0.73 of its potential returns per unit of risk. Arad is currently generating about -0.1 per unit of risk. If you would invest 3,047,000 in Levinstein Eng on September 1, 2024 and sell it today you would earn a total of 650,000 from holding Levinstein Eng or generate 21.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Levinstein Eng vs. Arad
Performance |
| Timeline |
| Levinstein Eng |
| Arad |
Levinstein Eng and Arad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Levinstein Eng and Arad
The main advantage of trading using opposite Levinstein Eng and Arad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Levinstein Eng position performs unexpectedly, Arad 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 Arad will offset losses from the drop in Arad's long position.| Levinstein Eng vs. Sella Real Estate | Levinstein Eng vs. Levinstein Prop | Levinstein Eng vs. Isras Investment | Levinstein Eng vs. Menivim The New |
| Arad vs. Amanet Management Systems | Arad vs. Dan Hotels | Arad vs. Scope Metals Group | Arad vs. Sofwave Medical |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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