Correlation Between Shagrir Group and Palram
Can any of the company-specific risk be diversified away by investing in both Shagrir Group and Palram 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 Shagrir Group and Palram into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shagrir Group Vehicle and Palram, you can compare the effects of market volatilities on Shagrir Group and Palram 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 Shagrir Group with a short position of Palram. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shagrir Group and Palram.
Diversification Opportunities for Shagrir Group and Palram
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shagrir and Palram is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shagrir Group Vehicle and Palram in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palram and Shagrir Group 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 Shagrir Group Vehicle are associated (or correlated) with Palram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palram has no effect on the direction of Shagrir Group i.e., Shagrir Group and Palram go up and down completely randomly.
Pair Corralation between Shagrir Group and Palram
Assuming the 90 days trading horizon Shagrir Group is expected to generate 1.32 times less return on investment than Palram. In addition to that, Shagrir Group is 1.3 times more volatile than Palram. It trades about 0.19 of its total potential returns per unit of risk. Palram is currently generating about 0.33 per unit of volatility. If you would invest 703,800 in Palram on September 1, 2024 and sell it today you would earn a total of 90,700 from holding Palram or generate 12.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shagrir Group Vehicle vs. Palram
Performance |
| Timeline |
| Shagrir Group Vehicle |
| Palram |
Shagrir Group and Palram Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shagrir Group and Palram
The main advantage of trading using opposite Shagrir Group and Palram positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shagrir Group position performs unexpectedly, Palram 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 Palram will offset losses from the drop in Palram's long position.| Shagrir Group vs. Arad | Shagrir Group vs. Alony Hetz Properties | Shagrir Group vs. Airport City | Shagrir Group vs. Harel Insurance Investments |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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