Correlation Between Shufersal and Salomon A
Can any of the company-specific risk be diversified away by investing in both Shufersal and Salomon A 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 Shufersal and Salomon A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shufersal and Salomon A Angel, you can compare the effects of market volatilities on Shufersal and Salomon A 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 Shufersal with a short position of Salomon A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shufersal and Salomon A.
Diversification Opportunities for Shufersal and Salomon A
Excellent diversification
The 3 months correlation between Shufersal and Salomon is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shufersal and Salomon A Angel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salomon A Angel and Shufersal 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 Shufersal are associated (or correlated) with Salomon A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salomon A Angel has no effect on the direction of Shufersal i.e., Shufersal and Salomon A go up and down completely randomly.
Pair Corralation between Shufersal and Salomon A
Assuming the 90 days trading horizon Shufersal is expected to generate 0.47 times more return on investment than Salomon A. However, Shufersal is 2.12 times less risky than Salomon A. It trades about 0.24 of its potential returns per unit of risk. Salomon A Angel is currently generating about 0.01 per unit of risk. If you would invest 252,000 in Shufersal on August 30, 2024 and sell it today you would earn a total of 112,200 from holding Shufersal or generate 44.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shufersal vs. Salomon A Angel
Performance |
| Timeline |
| Shufersal |
| Salomon A Angel |
Shufersal and Salomon A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shufersal and Salomon A
The main advantage of trading using opposite Shufersal and Salomon A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shufersal position performs unexpectedly, Salomon A 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 Salomon A will offset losses from the drop in Salomon A's long position.| Shufersal vs. B Communications | Shufersal vs. Holmes Place International | Shufersal vs. Nova | Shufersal vs. Petrochemical |
| Salomon A vs. Zanlakol | Salomon A vs. Gan Shmuel | Salomon A vs. Carmit | Salomon A vs. Sano Brunos Enterprises |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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