Correlation Between Nawi Brothers and Opal Balance
Can any of the company-specific risk be diversified away by investing in both Nawi Brothers and Opal Balance 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 Nawi Brothers and Opal Balance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nawi Brothers Group and Opal Balance, you can compare the effects of market volatilities on Nawi Brothers and Opal Balance 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 Nawi Brothers with a short position of Opal Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nawi Brothers and Opal Balance.
Diversification Opportunities for Nawi Brothers and Opal Balance
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nawi and Opal is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Nawi Brothers Group and Opal Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opal Balance and Nawi Brothers 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 Nawi Brothers Group are associated (or correlated) with Opal Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opal Balance has no effect on the direction of Nawi Brothers i.e., Nawi Brothers and Opal Balance go up and down completely randomly.
Pair Corralation between Nawi Brothers and Opal Balance
Assuming the 90 days trading horizon Nawi Brothers Group is expected to generate 0.92 times more return on investment than Opal Balance. However, Nawi Brothers Group is 1.09 times less risky than Opal Balance. It trades about 0.53 of its potential returns per unit of risk. Opal Balance is currently generating about 0.16 per unit of risk. If you would invest 399,000 in Nawi Brothers Group on November 27, 2024 and sell it today you would earn a total of 71,600 from holding Nawi Brothers Group or generate 17.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nawi Brothers Group vs. Opal Balance
Performance |
| Timeline |
| Nawi Brothers Group |
| Opal Balance |
Nawi Brothers and Opal Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nawi Brothers and Opal Balance
The main advantage of trading using opposite Nawi Brothers and Opal Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nawi Brothers position performs unexpectedly, Opal Balance 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 Opal Balance will offset losses from the drop in Opal Balance's long position.| Nawi Brothers vs. Isracard | Nawi Brothers vs. Bank Hapoalim | Nawi Brothers vs. Tadiran Hldg | Nawi Brothers vs. Mizrahi Tefahot |
| Opal Balance vs. Nawi Brothers Group | Opal Balance vs. EN Shoham Business | Opal Balance vs. Peninsula Group | Opal Balance vs. Shikun Binui |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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