Correlation Between EN Shoham and Formula
Can any of the company-specific risk be diversified away by investing in both EN Shoham and Formula 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 EN Shoham and Formula into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EN Shoham Business and Formula, you can compare the effects of market volatilities on EN Shoham and Formula 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 EN Shoham with a short position of Formula. Check out your portfolio center. Please also check ongoing floating volatility patterns of EN Shoham and Formula.
Diversification Opportunities for EN Shoham and Formula
Very poor diversification
The 3 months correlation between SHOM and Formula is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding EN Shoham Business and Formula in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formula and EN Shoham 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 EN Shoham Business are associated (or correlated) with Formula. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formula has no effect on the direction of EN Shoham i.e., EN Shoham and Formula go up and down completely randomly.
Pair Corralation between EN Shoham and Formula
Assuming the 90 days trading horizon EN Shoham Business is expected to generate 0.75 times more return on investment than Formula. However, EN Shoham Business is 1.33 times less risky than Formula. It trades about 0.51 of its potential returns per unit of risk. Formula is currently generating about 0.06 per unit of risk. If you would invest 58,360 in EN Shoham Business on September 5, 2024 and sell it today you would earn a total of 11,240 from holding EN Shoham Business or generate 19.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
EN Shoham Business vs. Formula
Performance |
| Timeline |
| EN Shoham Business |
| Formula |
EN Shoham and Formula Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EN Shoham and Formula
The main advantage of trading using opposite EN Shoham and Formula positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EN Shoham position performs unexpectedly, Formula 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 Formula will offset losses from the drop in Formula's long position.| EN Shoham vs. Menif Financial Services | EN Shoham vs. Accel Solutions Group | EN Shoham vs. Rani Zim Shopping | EN Shoham vs. Mivtach Shamir |
| Formula vs. Palram | Formula vs. Shagrir Group Vehicle | Formula vs. EN Shoham Business | Formula vs. Lapidoth |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |