Correlation Between Oron Group and Golan Plastic
Can any of the company-specific risk be diversified away by investing in both Oron Group and Golan Plastic 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 Oron Group and Golan Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oron Group Investments and Golan Plastic, you can compare the effects of market volatilities on Oron Group and Golan Plastic 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 Oron Group with a short position of Golan Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oron Group and Golan Plastic.
Diversification Opportunities for Oron Group and Golan Plastic
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oron and Golan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Oron Group Investments and Golan Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golan Plastic and Oron Group 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 Oron Group Investments are associated (or correlated) with Golan Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golan Plastic has no effect on the direction of Oron Group i.e., Oron Group and Golan Plastic go up and down completely randomly.
Pair Corralation between Oron Group and Golan Plastic
Assuming the 90 days trading horizon Oron Group is expected to generate 10.8 times less return on investment than Golan Plastic. But when comparing it to its historical volatility, Oron Group Investments is 1.09 times less risky than Golan Plastic. It trades about 0.04 of its potential returns per unit of risk. Golan Plastic is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 99,000 in Golan Plastic on September 1, 2024 and sell it today you would earn a total of 19,000 from holding Golan Plastic or generate 19.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oron Group Investments vs. Golan Plastic
Performance |
| Timeline |
| Oron Group Investments |
| Golan Plastic |
Oron Group and Golan Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oron Group and Golan Plastic
The main advantage of trading using opposite Oron Group and Golan Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oron Group position performs unexpectedly, Golan Plastic 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 Golan Plastic will offset losses from the drop in Golan Plastic's long position.| Oron Group vs. Shikun Binui | Oron Group vs. Ashtrom Group | Oron Group vs. Aura Investments | Oron Group vs. Shapir Engineering Industry |
| Golan Plastic vs. Arad | Golan Plastic vs. Alony Hetz Properties | Golan Plastic vs. Airport City | Golan Plastic vs. Harel Insurance Investments |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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