Correlation Between Retailors and Global Knafaim
Can any of the company-specific risk be diversified away by investing in both Retailors and Global Knafaim 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 Global Knafaim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retailors and Global Knafaim Leasing, you can compare the effects of market volatilities on Retailors and Global Knafaim 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 Global Knafaim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retailors and Global Knafaim.
Diversification Opportunities for Retailors and Global Knafaim
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Retailors and Global is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Retailors and Global Knafaim Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Knafaim Leasing 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 Global Knafaim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Knafaim Leasing has no effect on the direction of Retailors i.e., Retailors and Global Knafaim go up and down completely randomly.
Pair Corralation between Retailors and Global Knafaim
Assuming the 90 days trading horizon Retailors is expected to generate 1.78 times more return on investment than Global Knafaim. However, Retailors is 1.78 times more volatile than Global Knafaim Leasing. It trades about 0.28 of its potential returns per unit of risk. Global Knafaim Leasing is currently generating about -0.17 per unit of risk. If you would invest 641,300 in Retailors on August 28, 2024 and sell it today you would earn a total of 110,200 from holding Retailors or generate 17.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retailors vs. Global Knafaim Leasing
Performance |
| Timeline |
| Retailors |
| Global Knafaim Leasing |
Retailors and Global Knafaim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retailors and Global Knafaim
The main advantage of trading using opposite Retailors and Global Knafaim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retailors position performs unexpectedly, Global Knafaim 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 Global Knafaim will offset losses from the drop in Global Knafaim's long position.| Retailors vs. Nice | Retailors vs. The Gold Bond | Retailors vs. Bank Leumi Le Israel | Retailors vs. ICL Israel Chemicals |
| Global Knafaim vs. Arad | Global Knafaim vs. Alony Hetz Properties | Global Knafaim vs. Danel | Global Knafaim vs. Airport City |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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