Correlation Between Palram and Kardan Real
Can any of the company-specific risk be diversified away by investing in both Palram and Kardan Real 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 Palram and Kardan Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palram and Kardan Real Estate, you can compare the effects of market volatilities on Palram and Kardan Real 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 Palram with a short position of Kardan Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palram and Kardan Real.
Diversification Opportunities for Palram and Kardan Real
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Palram and Kardan is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Palram and Kardan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kardan Real Estate and Palram 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 Palram are associated (or correlated) with Kardan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kardan Real Estate has no effect on the direction of Palram i.e., Palram and Kardan Real go up and down completely randomly.
Pair Corralation between Palram and Kardan Real
Assuming the 90 days trading horizon Palram is expected to generate 1.02 times more return on investment than Kardan Real. However, Palram is 1.02 times more volatile than Kardan Real Estate. It trades about 0.21 of its potential returns per unit of risk. Kardan Real Estate is currently generating about 0.1 per unit of risk. If you would invest 355,214 in Palram on September 2, 2024 and sell it today you would earn a total of 439,286 from holding Palram or generate 123.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palram vs. Kardan Real Estate
Performance |
| Timeline |
| Palram |
| Kardan Real Estate |
Palram and Kardan Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palram and Kardan Real
The main advantage of trading using opposite Palram and Kardan Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palram position performs unexpectedly, Kardan Real 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 Kardan Real will offset losses from the drop in Kardan Real's long position.The idea behind Palram and Kardan Real Estate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kardan Real vs. Netanel Group | Kardan Real vs. Ashtrom Group | Kardan Real vs. Palram | Kardan Real vs. Israel Canada |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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