Correlation Between Mobile Max and Golan Plastic
Can any of the company-specific risk be diversified away by investing in both Mobile Max and Golan Plastic 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 Mobile Max and Golan Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile Max M and Golan Plastic, you can compare the effects of market volatilities on Mobile Max and Golan Plastic 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 Mobile Max with a short position of Golan Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile Max and Golan Plastic.
Diversification Opportunities for Mobile Max and Golan Plastic
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mobile and Golan is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Max M and Golan Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golan Plastic and Mobile Max 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 Mobile Max M are associated (or correlated) with Golan Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golan Plastic has no effect on the direction of Mobile Max i.e., Mobile Max and Golan Plastic go up and down completely randomly.
Pair Corralation between Mobile Max and Golan Plastic
Assuming the 90 days trading horizon Mobile Max M is expected to under-perform the Golan Plastic. But the stock apears to be less risky and, when comparing its historical volatility, Mobile Max M is 1.14 times less risky than Golan Plastic. The stock trades about -0.38 of its potential returns per unit of risk. The Golan Plastic is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 99,000 in Golan Plastic on September 1, 2024 and sell it today you would earn a total of 19,000 from holding Golan Plastic or generate 19.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mobile Max M vs. Golan Plastic
Performance |
Timeline |
Mobile Max M |
Golan Plastic |
Mobile Max and Golan Plastic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mobile Max and Golan Plastic
The main advantage of trading using opposite Mobile Max and Golan Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Max position performs unexpectedly, Golan Plastic 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 Golan Plastic will offset losses from the drop in Golan Plastic's long position.Mobile Max vs. TAT Technologies | Mobile Max vs. Bezeq Israeli Telecommunication | Mobile Max vs. Clal Biotechnology Industries | Mobile Max vs. Gamatronic Electronic Industries |
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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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