Correlation Between Melisron and Global Knafaim
Can any of the company-specific risk be diversified away by investing in both Melisron and Global Knafaim 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 Melisron and Global Knafaim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melisron and Global Knafaim Leasing, you can compare the effects of market volatilities on Melisron and Global Knafaim 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 Melisron with a short position of Global Knafaim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melisron and Global Knafaim.
Diversification Opportunities for Melisron and Global Knafaim
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Melisron and Global is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Melisron and Global Knafaim Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Knafaim Leasing and Melisron 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 Melisron are associated (or correlated) with Global Knafaim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Knafaim Leasing has no effect on the direction of Melisron i.e., Melisron and Global Knafaim go up and down completely randomly.
Pair Corralation between Melisron and Global Knafaim
Assuming the 90 days trading horizon Melisron is expected to generate 0.8 times more return on investment than Global Knafaim. However, Melisron is 1.25 times less risky than Global Knafaim. It trades about 0.3 of its potential returns per unit of risk. Global Knafaim Leasing is currently generating about -0.16 per unit of risk. If you would invest 2,975,000 in Melisron on September 1, 2024 and sell it today you would earn a total of 245,000 from holding Melisron or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melisron vs. Global Knafaim Leasing
Performance |
| Timeline |
| Melisron |
| Global Knafaim Leasing |
Melisron and Global Knafaim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melisron and Global Knafaim
The main advantage of trading using opposite Melisron and Global Knafaim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melisron position performs unexpectedly, Global Knafaim 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 Global Knafaim will offset losses from the drop in Global Knafaim's long position.The idea behind Melisron and Global Knafaim Leasing pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Global Knafaim vs. Arad | Global Knafaim vs. Alony Hetz Properties | Global Knafaim vs. Airport City | Global Knafaim vs. Harel Insurance Investments |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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