Correlation Between Michman Basad and Jacob Finance
Can any of the company-specific risk be diversified away by investing in both Michman Basad and Jacob Finance 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 Jacob Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Michman Basad and Jacob Finance And, you can compare the effects of market volatilities on Michman Basad and Jacob Finance 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 Jacob Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Michman Basad and Jacob Finance.
Diversification Opportunities for Michman Basad and Jacob Finance
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Michman and Jacob is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Michman Basad and Jacob Finance And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacob Finance And 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 Jacob Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacob Finance And has no effect on the direction of Michman Basad i.e., Michman Basad and Jacob Finance go up and down completely randomly.
Pair Corralation between Michman Basad and Jacob Finance
Assuming the 90 days trading horizon Michman Basad is expected to generate 0.49 times more return on investment than Jacob Finance. However, Michman Basad is 2.04 times less risky than Jacob Finance. It trades about 0.3 of its potential returns per unit of risk. Jacob Finance And is currently generating about 0.08 per unit of risk. If you would invest 1,883,000 in Michman Basad on August 25, 2024 and sell it today you would earn a total of 121,000 from holding Michman Basad or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Michman Basad vs. Jacob Finance And
Performance |
| Timeline |
| Michman Basad |
| Jacob Finance And |
Michman Basad and Jacob Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Michman Basad and Jacob Finance
The main advantage of trading using opposite Michman Basad and Jacob Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Michman Basad position performs unexpectedly, Jacob Finance 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 Jacob Finance will offset losses from the drop in Jacob Finance's long position.| Michman Basad vs. Computer Direct | Michman Basad vs. Victory Supermarket Chain | Michman Basad vs. Teuza A Fairchild | Michman Basad vs. Amanet Management Systems |
| Jacob Finance vs. Spuntech | Jacob Finance vs. Payment Financial Technologies | Jacob Finance vs. Wesure Global Tech | Jacob Finance vs. Blender Financial Technologies |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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