Correlation Between Netanel and Sarfati
Can any of the company-specific risk be diversified away by investing in both Netanel and Sarfati 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 Netanel and Sarfati into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netanel Group and Sarfati, you can compare the effects of market volatilities on Netanel and Sarfati 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 Netanel with a short position of Sarfati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netanel and Sarfati.
Diversification Opportunities for Netanel and Sarfati
Poor diversification
The 3 months correlation between Netanel and Sarfati is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Netanel Group and Sarfati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarfati and Netanel 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 Netanel Group are associated (or correlated) with Sarfati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarfati has no effect on the direction of Netanel i.e., Netanel and Sarfati go up and down completely randomly.
Pair Corralation between Netanel and Sarfati
Assuming the 90 days trading horizon Netanel Group is expected to generate 1.14 times more return on investment than Sarfati. However, Netanel is 1.14 times more volatile than Sarfati. It trades about 0.42 of its potential returns per unit of risk. Sarfati is currently generating about 0.23 per unit of risk. If you would invest 113,400 in Netanel Group on August 31, 2024 and sell it today you would earn a total of 14,000 from holding Netanel Group or generate 12.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netanel Group vs. Sarfati
Performance |
| Timeline |
| Netanel Group |
| Sarfati |
Netanel and Sarfati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netanel and Sarfati
The main advantage of trading using opposite Netanel and Sarfati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netanel position performs unexpectedly, Sarfati 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 Sarfati will offset losses from the drop in Sarfati's long position.| Netanel vs. El Al Israel | Netanel vs. Magic Software Enterprises | Netanel vs. Neto Malinda | Netanel vs. Orbit Technologies |
| Sarfati vs. Netanel Group | Sarfati vs. Mivtach Shamir | Sarfati vs. Almogim Holdings | Sarfati vs. Rotem Shani Entrepreneurship |
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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