Correlation Between Shufersal and Lahav LR
Can any of the company-specific risk be diversified away by investing in both Shufersal and Lahav LR 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 Lahav LR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shufersal and Lahav LR Real, you can compare the effects of market volatilities on Shufersal and Lahav LR 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 Lahav LR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shufersal and Lahav LR.
Diversification Opportunities for Shufersal and Lahav LR
Poor diversification
The 3 months correlation between Shufersal and Lahav is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Shufersal and Lahav LR Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lahav LR Real 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 Lahav LR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lahav LR Real has no effect on the direction of Shufersal i.e., Shufersal and Lahav LR go up and down completely randomly.
Pair Corralation between Shufersal and Lahav LR
Assuming the 90 days trading horizon Shufersal is expected to generate 5.63 times less return on investment than Lahav LR. In addition to that, Shufersal is 1.0 times more volatile than Lahav LR Real. It trades about 0.04 of its total potential returns per unit of risk. Lahav LR Real is currently generating about 0.23 per unit of volatility. If you would invest 53,500 in Lahav LR Real on November 28, 2024 and sell it today you would earn a total of 3,070 from holding Lahav LR Real or generate 5.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shufersal vs. Lahav LR Real
Performance |
| Timeline |
| Shufersal |
| Lahav LR Real |
Shufersal and Lahav LR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shufersal and Lahav LR
The main advantage of trading using opposite Shufersal and Lahav LR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shufersal position performs unexpectedly, Lahav LR 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 Lahav LR will offset losses from the drop in Lahav LR's long position.| Shufersal vs. Rami Levi | Shufersal vs. Bezeq Israeli Telecommunication | Shufersal vs. Bank Hapoalim | Shufersal vs. Bank Leumi Le Israel |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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