Correlation Between Rapac Communication and Dan Hotels
Can any of the company-specific risk be diversified away by investing in both Rapac Communication and Dan Hotels 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 Rapac Communication and Dan Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rapac Communication Infrastructure and Dan Hotels, you can compare the effects of market volatilities on Rapac Communication and Dan Hotels 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 Rapac Communication with a short position of Dan Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rapac Communication and Dan Hotels.
Diversification Opportunities for Rapac Communication and Dan Hotels
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rapac and Dan is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Rapac Communication Infrastruc and Dan Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dan Hotels and Rapac Communication 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 Rapac Communication Infrastructure are associated (or correlated) with Dan Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dan Hotels has no effect on the direction of Rapac Communication i.e., Rapac Communication and Dan Hotels go up and down completely randomly.
Pair Corralation between Rapac Communication and Dan Hotels
Assuming the 90 days trading horizon Rapac Communication Infrastructure is expected to under-perform the Dan Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Rapac Communication Infrastructure is 1.21 times less risky than Dan Hotels. The stock trades about -0.24 of its potential returns per unit of risk. The Dan Hotels is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 231,800 in Dan Hotels on August 30, 2024 and sell it today you would lose (4,300) from holding Dan Hotels or give up 1.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Rapac Communication Infrastruc vs. Dan Hotels
Performance |
| Timeline |
| Rapac Communication |
| Dan Hotels |
Rapac Communication and Dan Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rapac Communication and Dan Hotels
The main advantage of trading using opposite Rapac Communication and Dan Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rapac Communication position performs unexpectedly, Dan Hotels 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 Dan Hotels will offset losses from the drop in Dan Hotels' long position.| Rapac Communication vs. Ormat Technologies | Rapac Communication vs. Multi Retail Group | Rapac Communication vs. Nova | Rapac Communication vs. B Communications |
| Dan Hotels vs. Clal Insurance Enterprises | Dan Hotels vs. Israel Discount Bank | Dan Hotels vs. Bezeq Israeli Telecommunication | Dan Hotels vs. Alony Hetz Properties |
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 CEOs Directory module to screen CEOs from public companies around the world.
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