Correlation Between Michman Basad and Golan Plastic
Can any of the company-specific risk be diversified away by investing in both Michman Basad 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 Michman Basad and Golan Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Michman Basad and Golan Plastic, you can compare the effects of market volatilities on Michman Basad 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 Michman Basad with a short position of Golan Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Michman Basad and Golan Plastic.
Diversification Opportunities for Michman Basad and Golan Plastic
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Michman and Golan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Michman Basad and Golan Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golan Plastic and Michman Basad 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 Michman Basad 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 Michman Basad i.e., Michman Basad and Golan Plastic go up and down completely randomly.
Pair Corralation between Michman Basad and Golan Plastic
Assuming the 90 days trading horizon Michman Basad is expected to generate 1.34 times less return on investment than Golan Plastic. But when comparing it to its historical volatility, Michman Basad is 1.61 times less risky than Golan Plastic. It trades about 0.91 of its potential returns per unit of risk. Golan Plastic is currently generating about 0.76 of returns per unit of risk over similar time horizon. If you would invest 99,500 in Golan Plastic on September 12, 2024 and sell it today you would earn a total of 39,500 from holding Golan Plastic or generate 39.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Michman Basad vs. Golan Plastic
Performance |
| Timeline |
| Michman Basad |
| Golan Plastic |
Michman Basad and Golan Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Michman Basad and Golan Plastic
The main advantage of trading using opposite Michman Basad and Golan Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Michman Basad 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.| Michman Basad vs. Itay Financial AA | Michman Basad vs. YH Dimri Construction | Michman Basad vs. Blender Financial Technologies | Michman Basad vs. Clal Insurance Enterprises |
| Golan Plastic vs. Aran Research and | Golan Plastic vs. Al Bad Massuot Yitzhak | Golan Plastic vs. Analyst IMS Investment |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |