Correlation Between Multi Retail and Sure Tech
Can any of the company-specific risk be diversified away by investing in both Multi Retail and Sure Tech 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 Sure Tech 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 Sure Tech Investments LP, you can compare the effects of market volatilities on Multi Retail and Sure Tech 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 Sure Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Retail and Sure Tech.
Diversification Opportunities for Multi Retail and Sure Tech
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Multi and Sure is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Multi Retail Group and Sure Tech Investments LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sure Tech Investments 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 Sure Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sure Tech Investments has no effect on the direction of Multi Retail i.e., Multi Retail and Sure Tech go up and down completely randomly.
Pair Corralation between Multi Retail and Sure Tech
Assuming the 90 days trading horizon Multi Retail Group is expected to generate 1.09 times more return on investment than Sure Tech. However, Multi Retail is 1.09 times more volatile than Sure Tech Investments LP. It trades about 0.29 of its potential returns per unit of risk. Sure Tech Investments LP is currently generating about -0.08 per unit of risk. If you would invest 47,880 in Multi Retail Group on August 29, 2024 and sell it today you would earn a total of 59,820 from holding Multi Retail Group or generate 124.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Retail Group vs. Sure Tech Investments LP
Performance |
| Timeline |
| Multi Retail Group |
| Sure Tech Investments |
Multi Retail and Sure Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Retail and Sure Tech
The main advantage of trading using opposite Multi Retail and Sure Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Retail position performs unexpectedly, Sure Tech 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 Sure Tech will offset losses from the drop in Sure Tech's long position.| Multi Retail vs. Brainsway | Multi Retail vs. Mivne Real Estate | Multi Retail vs. Photomyne | Multi Retail vs. Bezeq Israeli Telecommunication |
| Sure Tech vs. Meitav Dash Investments | Sure Tech vs. IBI Inv House | Sure Tech vs. Mivtach Shamir | Sure Tech vs. Emilia Devel |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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