Correlation Between Retailors and YH Dimri
Can any of the company-specific risk be diversified away by investing in both Retailors and YH Dimri 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 Retailors and YH Dimri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retailors and YH Dimri Construction, you can compare the effects of market volatilities on Retailors and YH Dimri 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 Retailors with a short position of YH Dimri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retailors and YH Dimri.
Diversification Opportunities for Retailors and YH Dimri
Very poor diversification
The 3 months correlation between Retailors and DIMRI is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Retailors and YH Dimri Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YH Dimri Construction and Retailors 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 Retailors are associated (or correlated) with YH Dimri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YH Dimri Construction has no effect on the direction of Retailors i.e., Retailors and YH Dimri go up and down completely randomly.
Pair Corralation between Retailors and YH Dimri
Assuming the 90 days trading horizon Retailors is expected to generate 4.23 times less return on investment than YH Dimri. In addition to that, Retailors is 1.63 times more volatile than YH Dimri Construction. It trades about 0.02 of its total potential returns per unit of risk. YH Dimri Construction is currently generating about 0.13 per unit of volatility. If you would invest 2,799,905 in YH Dimri Construction on September 2, 2024 and sell it today you would earn a total of 643,095 from holding YH Dimri Construction or generate 22.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retailors vs. YH Dimri Construction
Performance |
| Timeline |
| Retailors |
| YH Dimri Construction |
Retailors and YH Dimri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retailors and YH Dimri
The main advantage of trading using opposite Retailors and YH Dimri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retailors position performs unexpectedly, YH Dimri 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 YH Dimri will offset losses from the drop in YH Dimri's long position.| Retailors vs. Nice | Retailors vs. The Gold Bond | Retailors vs. Bank Leumi Le Israel | Retailors vs. ICL Israel Chemicals |
| YH Dimri vs. Azrieli Group | YH Dimri vs. Israel Canada | YH Dimri vs. Ashtrom Group | YH Dimri vs. Shikun Binui |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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