Correlation Between Malam Team and Hilan
Can any of the company-specific risk be diversified away by investing in both Malam Team and Hilan 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 Malam Team and Hilan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malam Team and Hilan, you can compare the effects of market volatilities on Malam Team and Hilan 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 Malam Team with a short position of Hilan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malam Team and Hilan.
Diversification Opportunities for Malam Team and Hilan
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Malam and Hilan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Malam Team and Hilan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilan and Malam Team 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 Malam Team are associated (or correlated) with Hilan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilan has no effect on the direction of Malam Team i.e., Malam Team and Hilan go up and down completely randomly.
Pair Corralation between Malam Team and Hilan
Assuming the 90 days trading horizon Malam Team is expected to generate 1.35 times more return on investment than Hilan. However, Malam Team is 1.35 times more volatile than Hilan. It trades about 0.39 of its potential returns per unit of risk. Hilan is currently generating about 0.22 per unit of risk. If you would invest 636,500 in Malam Team on August 29, 2024 and sell it today you would earn a total of 155,700 from holding Malam Team or generate 24.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malam Team vs. Hilan
Performance |
| Timeline |
| Malam Team |
| Hilan |
Malam Team and Hilan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malam Team and Hilan
The main advantage of trading using opposite Malam Team and Hilan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malam Team position performs unexpectedly, Hilan 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 Hilan will offset losses from the drop in Hilan's long position.| Malam Team vs. Automatic Bank Services | Malam Team vs. EN Shoham Business | Malam Team vs. Rapac Communication Infrastructure | Malam Team vs. Tadiran Hldg |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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