Correlation Between Neto ME and Shufersal
Can any of the company-specific risk be diversified away by investing in both Neto ME and Shufersal 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 Neto ME and Shufersal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neto ME Holdings and Shufersal, you can compare the effects of market volatilities on Neto ME and Shufersal 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 Neto ME with a short position of Shufersal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neto ME and Shufersal.
Diversification Opportunities for Neto ME and Shufersal
Very poor diversification
The 3 months correlation between Neto and Shufersal is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Neto ME Holdings and Shufersal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shufersal and Neto ME 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 Neto ME Holdings are associated (or correlated) with Shufersal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shufersal has no effect on the direction of Neto ME i.e., Neto ME and Shufersal go up and down completely randomly.
Pair Corralation between Neto ME and Shufersal
Assuming the 90 days trading horizon Neto ME is expected to generate 2.79 times less return on investment than Shufersal. In addition to that, Neto ME is 1.2 times more volatile than Shufersal. It trades about 0.04 of its total potential returns per unit of risk. Shufersal is currently generating about 0.13 per unit of volatility. If you would invest 188,304 in Shufersal on August 31, 2024 and sell it today you would earn a total of 175,896 from holding Shufersal or generate 93.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neto ME Holdings vs. Shufersal
Performance |
| Timeline |
| Neto ME Holdings |
| Shufersal |
Neto ME and Shufersal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neto ME and Shufersal
The main advantage of trading using opposite Neto ME and Shufersal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neto ME position performs unexpectedly, Shufersal 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 Shufersal will offset losses from the drop in Shufersal's long position.| Neto ME vs. Kerur Holdings | Neto ME vs. Salomon A Angel | Neto ME vs. Sano Brunos Enterprises | Neto ME vs. Al Bad Massuot Yitzhak |
| Shufersal vs. Rami Levi | Shufersal vs. Bezeq Israeli Telecommunication | Shufersal vs. Bank Hapoalim | Shufersal vs. Bank Leumi Le Israel |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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