Correlation Between Peninsula and EN Shoham
Can any of the company-specific risk be diversified away by investing in both Peninsula and EN Shoham 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 Peninsula and EN Shoham into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peninsula Group and EN Shoham Business, you can compare the effects of market volatilities on Peninsula and EN Shoham 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 Peninsula with a short position of EN Shoham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peninsula and EN Shoham.
Diversification Opportunities for Peninsula and EN Shoham
Poor diversification
The 3 months correlation between Peninsula and SHOM is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Peninsula Group and EN Shoham Business in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EN Shoham Business and Peninsula 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 Peninsula Group are associated (or correlated) with EN Shoham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EN Shoham Business has no effect on the direction of Peninsula i.e., Peninsula and EN Shoham go up and down completely randomly.
Pair Corralation between Peninsula and EN Shoham
Assuming the 90 days trading horizon Peninsula Group is expected to generate 1.68 times more return on investment than EN Shoham. However, Peninsula is 1.68 times more volatile than EN Shoham Business. It trades about 0.48 of its potential returns per unit of risk. EN Shoham Business is currently generating about 0.03 per unit of risk. If you would invest 20,380 in Peninsula Group on December 1, 2024 and sell it today you would earn a total of 3,610 from holding Peninsula Group or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peninsula Group vs. EN Shoham Business
Performance |
| Timeline |
| Peninsula Group |
| EN Shoham Business |
Peninsula and EN Shoham Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peninsula and EN Shoham
The main advantage of trading using opposite Peninsula and EN Shoham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peninsula position performs unexpectedly, EN Shoham 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 EN Shoham will offset losses from the drop in EN Shoham's long position.| Peninsula vs. Opal Balance | Peninsula vs. Nawi Brothers Group | Peninsula vs. Mizrahi Tefahot | Peninsula vs. SR Accord |
| EN Shoham vs. Menif Financial Services | EN Shoham vs. Accel Solutions Group | EN Shoham vs. Rani Zim Shopping | EN Shoham vs. Mivtach Shamir |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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