Correlation Between Retailors and Shagrir Group
Can any of the company-specific risk be diversified away by investing in both Retailors and Shagrir Group 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 Shagrir Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retailors and Shagrir Group Vehicle, you can compare the effects of market volatilities on Retailors and Shagrir Group 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 Shagrir Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retailors and Shagrir Group.
Diversification Opportunities for Retailors and Shagrir Group
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Retailors and Shagrir is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Retailors and Shagrir Group Vehicle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shagrir Group Vehicle 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 Shagrir Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shagrir Group Vehicle has no effect on the direction of Retailors i.e., Retailors and Shagrir Group go up and down completely randomly.
Pair Corralation between Retailors and Shagrir Group
Assuming the 90 days trading horizon Retailors is expected to generate 1.04 times less return on investment than Shagrir Group. In addition to that, Retailors is 1.22 times more volatile than Shagrir Group Vehicle. It trades about 0.15 of its total potential returns per unit of risk. Shagrir Group Vehicle is currently generating about 0.19 per unit of volatility. If you would invest 110,900 in Shagrir Group Vehicle on September 1, 2024 and sell it today you would earn a total of 10,300 from holding Shagrir Group Vehicle or generate 9.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retailors vs. Shagrir Group Vehicle
Performance |
| Timeline |
| Retailors |
| Shagrir Group Vehicle |
Retailors and Shagrir Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retailors and Shagrir Group
The main advantage of trading using opposite Retailors and Shagrir Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retailors position performs unexpectedly, Shagrir Group 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 Shagrir Group will offset losses from the drop in Shagrir Group's long position.| Retailors vs. Nice | Retailors vs. The Gold Bond | Retailors vs. Bank Leumi Le Israel | Retailors vs. ICL Israel Chemicals |
| Shagrir Group vs. Arad | Shagrir Group vs. Alony Hetz Properties | Shagrir Group vs. Airport City | Shagrir Group vs. Harel Insurance Investments |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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