Correlation Between Naphtha and Menora Miv
Can any of the company-specific risk be diversified away by investing in both Naphtha and Menora Miv 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 Naphtha and Menora Miv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naphtha and Menora Miv Hld, you can compare the effects of market volatilities on Naphtha and Menora Miv 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 Naphtha with a short position of Menora Miv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naphtha and Menora Miv.
Diversification Opportunities for Naphtha and Menora Miv
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Naphtha and Menora is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Naphtha and Menora Miv Hld in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Menora Miv Hld and Naphtha 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 Naphtha are associated (or correlated) with Menora Miv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Menora Miv Hld has no effect on the direction of Naphtha i.e., Naphtha and Menora Miv go up and down completely randomly.
Pair Corralation between Naphtha and Menora Miv
Assuming the 90 days trading horizon Naphtha is expected to generate 1.03 times less return on investment than Menora Miv. But when comparing it to its historical volatility, Naphtha is 1.0 times less risky than Menora Miv. It trades about 0.7 of its potential returns per unit of risk. Menora Miv Hld is currently generating about 0.72 of returns per unit of risk over similar time horizon. If you would invest 1,107,000 in Menora Miv Hld on August 29, 2024 and sell it today you would earn a total of 236,000 from holding Menora Miv Hld or generate 21.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naphtha vs. Menora Miv Hld
Performance |
| Timeline |
| Naphtha |
| Menora Miv Hld |
Naphtha and Menora Miv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naphtha and Menora Miv
The main advantage of trading using opposite Naphtha and Menora Miv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naphtha position performs unexpectedly, Menora Miv 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 Menora Miv will offset losses from the drop in Menora Miv's long position.| Naphtha vs. Migdal Insurance | Naphtha vs. Harel Insurance Investments | Naphtha vs. Delek Automotive Systems | Naphtha vs. Airport City |
| Menora Miv vs. Harel Insurance Investments | Menora Miv vs. Migdal Insurance | Menora Miv vs. Clal Insurance Enterprises | Menora Miv vs. The Phoenix Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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