Correlation Between EN Shoham and Generation Capital
Can any of the company-specific risk be diversified away by investing in both EN Shoham and Generation Capital 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 Generation Capital 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 Generation Capital, you can compare the effects of market volatilities on EN Shoham and Generation Capital 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 Generation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of EN Shoham and Generation Capital.
Diversification Opportunities for EN Shoham and Generation Capital
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SHOM and Generation is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding EN Shoham Business and Generation Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Capital 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 Generation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Capital has no effect on the direction of EN Shoham i.e., EN Shoham and Generation Capital go up and down completely randomly.
Pair Corralation between EN Shoham and Generation Capital
Assuming the 90 days trading horizon EN Shoham is expected to generate 16.27 times less return on investment than Generation Capital. But when comparing it to its historical volatility, EN Shoham Business is 1.2 times less risky than Generation Capital. It trades about 0.01 of its potential returns per unit of risk. Generation Capital is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,900 in Generation Capital on November 8, 2024 and sell it today you would earn a total of 190.00 from holding Generation Capital or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EN Shoham Business vs. Generation Capital
Performance |
| Timeline |
| EN Shoham Business |
| Generation Capital |
EN Shoham and Generation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EN Shoham and Generation Capital
The main advantage of trading using opposite EN Shoham and Generation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EN Shoham position performs unexpectedly, Generation Capital 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 Generation Capital will offset losses from the drop in Generation Capital'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 |
| Generation Capital vs. PennantPark Floating Rate | Generation Capital vs. Altshuler Shaham Financial | Generation Capital vs. Meitav Dash Investments | Generation Capital vs. IBI Inv House |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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