Correlation Between Menif Financial and GODM Investments
Can any of the company-specific risk be diversified away by investing in both Menif Financial and GODM Investments 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 Menif Financial and GODM Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Menif Financial Services and GODM Investments, you can compare the effects of market volatilities on Menif Financial and GODM Investments 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 Menif Financial with a short position of GODM Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Menif Financial and GODM Investments.
Diversification Opportunities for Menif Financial and GODM Investments
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Menif and GODM is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Menif Financial Services and GODM Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GODM Investments and Menif Financial 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 Menif Financial Services are associated (or correlated) with GODM Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GODM Investments has no effect on the direction of Menif Financial i.e., Menif Financial and GODM Investments go up and down completely randomly.
Pair Corralation between Menif Financial and GODM Investments
Assuming the 90 days trading horizon Menif Financial Services is expected to generate 0.52 times more return on investment than GODM Investments. However, Menif Financial Services is 1.93 times less risky than GODM Investments. It trades about 0.12 of its potential returns per unit of risk. GODM Investments is currently generating about -0.07 per unit of risk. If you would invest 113,425 in Menif Financial Services on September 3, 2024 and sell it today you would earn a total of 34,575 from holding Menif Financial Services or generate 30.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Menif Financial Services vs. GODM Investments
Performance |
| Timeline |
| Menif Financial Services |
| GODM Investments |
Menif Financial and GODM Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Menif Financial and GODM Investments
The main advantage of trading using opposite Menif Financial and GODM Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Menif Financial position performs unexpectedly, GODM Investments 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 GODM Investments will offset losses from the drop in GODM Investments' long position.| Menif Financial vs. Sure Tech Investments LP | Menif Financial vs. Arad Investment Industrial | Menif Financial vs. Oron Group Investments | Menif Financial vs. Harel Insurance Investments |
| GODM Investments vs. Bank Hapoalim | GODM Investments vs. Israel Discount Bank | GODM Investments vs. First International Bank | GODM Investments vs. Elbit Systems |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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