Correlation Between EN Shoham and Plaza Centers
Can any of the company-specific risk be diversified away by investing in both EN Shoham and Plaza Centers 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 Plaza Centers 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 Plaza Centers NV, you can compare the effects of market volatilities on EN Shoham and Plaza Centers 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 Plaza Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of EN Shoham and Plaza Centers.
Diversification Opportunities for EN Shoham and Plaza Centers
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SHOM and Plaza is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding EN Shoham Business and Plaza Centers NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Centers NV 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 Plaza Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Centers NV has no effect on the direction of EN Shoham i.e., EN Shoham and Plaza Centers go up and down completely randomly.
Pair Corralation between EN Shoham and Plaza Centers
Assuming the 90 days trading horizon EN Shoham Business is expected to generate 0.23 times more return on investment than Plaza Centers. However, EN Shoham Business is 4.39 times less risky than Plaza Centers. It trades about 0.56 of its potential returns per unit of risk. Plaza Centers NV is currently generating about 0.07 per unit of risk. If you would invest 78,270 in EN Shoham Business on October 22, 2024 and sell it today you would earn a total of 15,390 from holding EN Shoham Business or generate 19.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EN Shoham Business vs. Plaza Centers NV
Performance |
| Timeline |
| EN Shoham Business |
| Plaza Centers NV |
EN Shoham and Plaza Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EN Shoham and Plaza Centers
The main advantage of trading using opposite EN Shoham and Plaza Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EN Shoham position performs unexpectedly, Plaza Centers 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 Plaza Centers will offset losses from the drop in Plaza Centers' 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 |
| Plaza Centers vs. Mobile Max M | Plaza Centers vs. Rapac Communication Infrastructure | Plaza Centers vs. Scope Metals Group | Plaza Centers vs. Israel Discount Bank |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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