Correlation Between Polyram Plastic and Amot Investments
Can any of the company-specific risk be diversified away by investing in both Polyram Plastic and Amot Investments 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 Polyram Plastic and Amot Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polyram Plastic Industries and Amot Investments, you can compare the effects of market volatilities on Polyram Plastic and Amot Investments 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 Polyram Plastic with a short position of Amot Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polyram Plastic and Amot Investments.
Diversification Opportunities for Polyram Plastic and Amot Investments
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Polyram and Amot is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Polyram Plastic Industries and Amot Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amot Investments and Polyram Plastic 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 Polyram Plastic Industries are associated (or correlated) with Amot Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amot Investments has no effect on the direction of Polyram Plastic i.e., Polyram Plastic and Amot Investments go up and down completely randomly.
Pair Corralation between Polyram Plastic and Amot Investments
Assuming the 90 days trading horizon Polyram Plastic Industries is expected to generate 0.91 times more return on investment than Amot Investments. However, Polyram Plastic Industries is 1.1 times less risky than Amot Investments. It trades about 0.07 of its potential returns per unit of risk. Amot Investments is currently generating about 0.02 per unit of risk. If you would invest 93,099 in Polyram Plastic Industries on August 29, 2024 and sell it today you would earn a total of 39,301 from holding Polyram Plastic Industries or generate 42.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polyram Plastic Industries vs. Amot Investments
Performance |
| Timeline |
| Polyram Plastic Indu |
| Amot Investments |
Polyram Plastic and Amot Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polyram Plastic and Amot Investments
The main advantage of trading using opposite Polyram Plastic and Amot Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polyram Plastic position performs unexpectedly, Amot Investments 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 Amot Investments will offset losses from the drop in Amot Investments' long position.| Polyram Plastic vs. Rimoni | Polyram Plastic vs. Kafrit | Polyram Plastic vs. Brainsway | Polyram Plastic vs. Mivne Real Estate |
| Amot Investments vs. Alony Hetz Properties | Amot Investments vs. Azrieli Group | Amot Investments vs. Melisron | Amot Investments 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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