Correlation Between Shagrir Group and Sofwave Medical
Can any of the company-specific risk be diversified away by investing in both Shagrir Group and Sofwave Medical 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 Sofwave Medical 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 Sofwave Medical, you can compare the effects of market volatilities on Shagrir Group and Sofwave Medical 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 Sofwave Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shagrir Group and Sofwave Medical.
Diversification Opportunities for Shagrir Group and Sofwave Medical
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shagrir and Sofwave is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Shagrir Group Vehicle and Sofwave Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sofwave Medical 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 Sofwave Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sofwave Medical has no effect on the direction of Shagrir Group i.e., Shagrir Group and Sofwave Medical go up and down completely randomly.
Pair Corralation between Shagrir Group and Sofwave Medical
Assuming the 90 days trading horizon Shagrir Group Vehicle is expected to generate 0.75 times more return on investment than Sofwave Medical. However, Shagrir Group Vehicle is 1.33 times less risky than Sofwave Medical. It trades about 0.23 of its potential returns per unit of risk. Sofwave Medical is currently generating about -0.14 per unit of risk. If you would invest 108,700 in Shagrir Group Vehicle on August 31, 2024 and sell it today you would earn a total of 12,500 from holding Shagrir Group Vehicle or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shagrir Group Vehicle vs. Sofwave Medical
Performance |
| Timeline |
| Shagrir Group Vehicle |
| Sofwave Medical |
Shagrir Group and Sofwave Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shagrir Group and Sofwave Medical
The main advantage of trading using opposite Shagrir Group and Sofwave Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shagrir Group position performs unexpectedly, Sofwave Medical 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 Sofwave Medical will offset losses from the drop in Sofwave Medical's long position.| Shagrir Group vs. EN Shoham Business | Shagrir Group vs. Suny Cellular Communication | Shagrir Group vs. Rani Zim Shopping | Shagrir Group vs. Tadiran Hldg |
| Sofwave Medical vs. Intercure | Sofwave Medical vs. Epitomee Medical | Sofwave Medical vs. Bio View | Sofwave Medical vs. Endymed |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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