Correlation Between YD More and Sofwave Medical
Can any of the company-specific risk be diversified away by investing in both YD More and Sofwave Medical 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 YD More and Sofwave Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YD More Investments and Sofwave Medical, you can compare the effects of market volatilities on YD More and Sofwave Medical 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 YD More with a short position of Sofwave Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of YD More and Sofwave Medical.
Diversification Opportunities for YD More and Sofwave Medical
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between MRIN and Sofwave is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding YD More Investments and Sofwave Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sofwave Medical and YD More 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 YD More Investments are associated (or correlated) with Sofwave Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sofwave Medical has no effect on the direction of YD More i.e., YD More and Sofwave Medical go up and down completely randomly.
Pair Corralation between YD More and Sofwave Medical
Assuming the 90 days trading horizon YD More Investments is expected to generate 1.05 times more return on investment than Sofwave Medical. However, YD More is 1.05 times more volatile than Sofwave Medical. It trades about 0.33 of its potential returns per unit of risk. Sofwave Medical is currently generating about 0.03 per unit of risk. If you would invest 120,403 in YD More Investments on September 18, 2024 and sell it today you would earn a total of 23,897 from holding YD More Investments or generate 19.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
YD More Investments vs. Sofwave Medical
Performance |
| Timeline |
| YD More Investments |
| Sofwave Medical |
YD More and Sofwave Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YD More and Sofwave Medical
The main advantage of trading using opposite YD More and Sofwave Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YD More position performs unexpectedly, Sofwave Medical 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 Sofwave Medical will offset losses from the drop in Sofwave Medical's long position.| YD More vs. Bank Hapoalim | YD More vs. Israel Discount Bank | YD More vs. Mizrahi Tefahot | YD More vs. Bezeq Israeli Telecommunication |
| Sofwave Medical vs. Harel Insurance Investments | Sofwave Medical vs. Shagrir Group Vehicle | Sofwave Medical vs. Rapac Communication Infrastructure | Sofwave Medical vs. Batm Advanced Communications |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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