Correlation Between Shufersal and Rami Levi
Can any of the company-specific risk be diversified away by investing in both Shufersal and Rami Levi 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 Rami Levi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shufersal and Rami Levi, you can compare the effects of market volatilities on Shufersal and Rami Levi 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 Rami Levi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shufersal and Rami Levi.
Diversification Opportunities for Shufersal and Rami Levi
Poor diversification
The 3 months correlation between Shufersal and Rami is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Shufersal and Rami Levi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rami Levi 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 Rami Levi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rami Levi has no effect on the direction of Shufersal i.e., Shufersal and Rami Levi go up and down completely randomly.
Pair Corralation between Shufersal and Rami Levi
Assuming the 90 days trading horizon Shufersal is expected to generate 1.43 times more return on investment than Rami Levi. However, Shufersal is 1.43 times more volatile than Rami Levi. It trades about 0.14 of its potential returns per unit of risk. Rami Levi is currently generating about 0.04 per unit of risk. If you would invest 182,076 in Shufersal on August 28, 2024 and sell it today you would earn a total of 164,624 from holding Shufersal or generate 90.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shufersal vs. Rami Levi
Performance |
| Timeline |
| Shufersal |
| Rami Levi |
Shufersal and Rami Levi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shufersal and Rami Levi
The main advantage of trading using opposite Shufersal and Rami Levi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shufersal position performs unexpectedly, Rami Levi 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 Rami Levi will offset losses from the drop in Rami Levi's long position.| Shufersal vs. Rami Levi | Shufersal vs. Bezeq Israeli Telecommunication | Shufersal vs. Bank Hapoalim | Shufersal vs. Bank Leumi Le Israel |
| Rami Levi vs. Shufersal | Rami Levi vs. Bank Leumi Le Israel | Rami Levi vs. Bezeq Israeli Telecommunication | Rami Levi vs. Bank Hapoalim |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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