Correlation Between Shufersal and Hod Assaf
Can any of the company-specific risk be diversified away by investing in both Shufersal and Hod Assaf 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 Hod Assaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shufersal and Hod Assaf Industries, you can compare the effects of market volatilities on Shufersal and Hod Assaf 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 Hod Assaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shufersal and Hod Assaf.
Diversification Opportunities for Shufersal and Hod Assaf
Poor diversification
The 3 months correlation between Shufersal and Hod is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Shufersal and Hod Assaf Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hod Assaf Industries 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 Hod Assaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hod Assaf Industries has no effect on the direction of Shufersal i.e., Shufersal and Hod Assaf go up and down completely randomly.
Pair Corralation between Shufersal and Hod Assaf
Assuming the 90 days trading horizon Shufersal is expected to generate 0.63 times more return on investment than Hod Assaf. However, Shufersal is 1.58 times less risky than Hod Assaf. It trades about 0.13 of its potential returns per unit of risk. Hod Assaf Industries is currently generating about 0.05 per unit of risk. If you would invest 188,304 in Shufersal on August 31, 2024 and sell it today you would earn a total of 175,896 from holding Shufersal or generate 93.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.66% |
| Values | Daily Returns |
Shufersal vs. Hod Assaf Industries
Performance |
| Timeline |
| Shufersal |
| Hod Assaf Industries |
Shufersal and Hod Assaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shufersal and Hod Assaf
The main advantage of trading using opposite Shufersal and Hod Assaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shufersal position performs unexpectedly, Hod Assaf 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 Hod Assaf will offset losses from the drop in Hod Assaf's long position.| Shufersal vs. Rami Levi | Shufersal vs. Bezeq Israeli Telecommunication | Shufersal vs. Bank Hapoalim | Shufersal vs. Bank Leumi Le Israel |
| Hod Assaf vs. Maytronics | Hod Assaf vs. Shufersal | Hod Assaf vs. Alony Hetz Properties | Hod Assaf vs. Danel |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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