Correlation Between Shikun Binui and Nawi Brothers
Can any of the company-specific risk be diversified away by investing in both Shikun Binui and Nawi Brothers 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 Shikun Binui and Nawi Brothers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shikun Binui and Nawi Brothers Group, you can compare the effects of market volatilities on Shikun Binui and Nawi Brothers 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 Shikun Binui with a short position of Nawi Brothers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shikun Binui and Nawi Brothers.
Diversification Opportunities for Shikun Binui and Nawi Brothers
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shikun and Nawi is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shikun Binui and Nawi Brothers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nawi Brothers Group and Shikun Binui 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 Shikun Binui are associated (or correlated) with Nawi Brothers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nawi Brothers Group has no effect on the direction of Shikun Binui i.e., Shikun Binui and Nawi Brothers go up and down completely randomly.
Pair Corralation between Shikun Binui and Nawi Brothers
Assuming the 90 days trading horizon Shikun Binui is expected to generate 1.93 times less return on investment than Nawi Brothers. In addition to that, Shikun Binui is 1.83 times more volatile than Nawi Brothers Group. It trades about 0.02 of its total potential returns per unit of risk. Nawi Brothers Group is currently generating about 0.07 per unit of volatility. If you would invest 220,188 in Nawi Brothers Group on September 1, 2024 and sell it today you would earn a total of 116,312 from holding Nawi Brothers Group or generate 52.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shikun Binui vs. Nawi Brothers Group
Performance |
| Timeline |
| Shikun Binui |
| Nawi Brothers Group |
Shikun Binui and Nawi Brothers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shikun Binui and Nawi Brothers
The main advantage of trading using opposite Shikun Binui and Nawi Brothers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shikun Binui position performs unexpectedly, Nawi Brothers 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 Nawi Brothers will offset losses from the drop in Nawi Brothers' long position.| Shikun Binui vs. Israel Discount Bank | Shikun Binui vs. Bezeq Israeli Telecommunication | Shikun Binui vs. Azrieli Group | Shikun Binui vs. Bank Hapoalim |
| Nawi Brothers vs. Menif Financial Services | Nawi Brothers vs. Accel Solutions Group | Nawi Brothers vs. Rani Zim Shopping | Nawi Brothers vs. Rapac Communication Infrastructure |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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