Correlation Between Scope Metals and Erika Carmel
Can any of the company-specific risk be diversified away by investing in both Scope Metals and Erika Carmel 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 Scope Metals and Erika Carmel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scope Metals Group and Erika Carmel, you can compare the effects of market volatilities on Scope Metals and Erika Carmel 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 Scope Metals with a short position of Erika Carmel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scope Metals and Erika Carmel.
Diversification Opportunities for Scope Metals and Erika Carmel
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scope and Erika is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Scope Metals Group and Erika Carmel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erika Carmel and Scope Metals 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 Scope Metals Group are associated (or correlated) with Erika Carmel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erika Carmel has no effect on the direction of Scope Metals i.e., Scope Metals and Erika Carmel go up and down completely randomly.
Pair Corralation between Scope Metals and Erika Carmel
Assuming the 90 days trading horizon Scope Metals is expected to generate 5.9 times less return on investment than Erika Carmel. But when comparing it to its historical volatility, Scope Metals Group is 1.94 times less risky than Erika Carmel. It trades about 0.01 of its potential returns per unit of risk. Erika Carmel is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,820 in Erika Carmel on September 2, 2024 and sell it today you would earn a total of 290.00 from holding Erika Carmel or generate 15.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scope Metals Group vs. Erika Carmel
Performance |
| Timeline |
| Scope Metals Group |
| Erika Carmel |
Scope Metals and Erika Carmel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scope Metals and Erika Carmel
The main advantage of trading using opposite Scope Metals and Erika Carmel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scope Metals position performs unexpectedly, Erika Carmel 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 Erika Carmel will offset losses from the drop in Erika Carmel's long position.| Scope Metals vs. Delek Automotive Systems | Scope Metals vs. Kerur Holdings | Scope Metals vs. Neto ME Holdings | Scope Metals vs. Bank Leumi Le Israel |
| Erika Carmel vs. Rapac Communication Infrastructure | Erika Carmel vs. Altshuler Shaham Financial | Erika Carmel vs. Gamatronic Electronic Industries | Erika Carmel vs. Millennium Food Tech LP |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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