Correlation Between Multi Retail and Rimon Consulting
Can any of the company-specific risk be diversified away by investing in both Multi Retail and Rimon Consulting 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 Multi Retail and Rimon Consulting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Retail Group and Rimon Consulting Management, you can compare the effects of market volatilities on Multi Retail and Rimon Consulting 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 Multi Retail with a short position of Rimon Consulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Retail and Rimon Consulting.
Diversification Opportunities for Multi Retail and Rimon Consulting
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Multi and Rimon is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Multi Retail Group and Rimon Consulting Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rimon Consulting Man and Multi Retail 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 Multi Retail Group are associated (or correlated) with Rimon Consulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rimon Consulting Man has no effect on the direction of Multi Retail i.e., Multi Retail and Rimon Consulting go up and down completely randomly.
Pair Corralation between Multi Retail and Rimon Consulting
Assuming the 90 days trading horizon Multi Retail is expected to generate 16.78 times less return on investment than Rimon Consulting. In addition to that, Multi Retail is 1.05 times more volatile than Rimon Consulting Management. It trades about 0.02 of its total potential returns per unit of risk. Rimon Consulting Management is currently generating about 0.43 per unit of volatility. If you would invest 362,300 in Rimon Consulting Management on September 1, 2024 and sell it today you would earn a total of 79,400 from holding Rimon Consulting Management or generate 21.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Retail Group vs. Rimon Consulting Management
Performance |
| Timeline |
| Multi Retail Group |
| Rimon Consulting Man |
Multi Retail and Rimon Consulting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Retail and Rimon Consulting
The main advantage of trading using opposite Multi Retail and Rimon Consulting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Retail position performs unexpectedly, Rimon Consulting 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 Rimon Consulting will offset losses from the drop in Rimon Consulting's long position.| Multi Retail vs. Suny Cellular Communication | Multi Retail vs. Teuza A Fairchild | Multi Retail vs. Israel China Biotechnology | Multi Retail vs. B Communications |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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