Correlation Between Photomyne and Israel Opportunity
Can any of the company-specific risk be diversified away by investing in both Photomyne and Israel Opportunity 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 Photomyne and Israel Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photomyne and Israel Opportunity , you can compare the effects of market volatilities on Photomyne and Israel Opportunity 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 Photomyne with a short position of Israel Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photomyne and Israel Opportunity.
Diversification Opportunities for Photomyne and Israel Opportunity
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Photomyne and Israel is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Photomyne and Israel Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Opportunity and Photomyne 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 Photomyne are associated (or correlated) with Israel Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Opportunity has no effect on the direction of Photomyne i.e., Photomyne and Israel Opportunity go up and down completely randomly.
Pair Corralation between Photomyne and Israel Opportunity
Assuming the 90 days trading horizon Photomyne is expected to generate 0.34 times more return on investment than Israel Opportunity. However, Photomyne is 2.98 times less risky than Israel Opportunity. It trades about -0.14 of its potential returns per unit of risk. Israel Opportunity is currently generating about -0.12 per unit of risk. If you would invest 285,700 in Photomyne on August 29, 2024 and sell it today you would lose (7,300) from holding Photomyne or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Photomyne vs. Israel Opportunity
Performance |
| Timeline |
| Photomyne |
| Israel Opportunity |
Photomyne and Israel Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Photomyne and Israel Opportunity
The main advantage of trading using opposite Photomyne and Israel Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photomyne position performs unexpectedly, Israel Opportunity 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 Israel Opportunity will offset losses from the drop in Israel Opportunity's long position.| Photomyne vs. Priortech | Photomyne vs. Magic Software Enterprises | Photomyne vs. Ormat Technologies | Photomyne vs. Spuntech |
| Israel Opportunity vs. Lapidoth | Israel Opportunity vs. Ilex Medical | Israel Opportunity vs. Aerodrome Group | Israel Opportunity vs. Opal Balance |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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