Correlation Between Sofwave Medical and Erika Carmel
Can any of the company-specific risk be diversified away by investing in both Sofwave Medical and Erika Carmel 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 Sofwave Medical and Erika Carmel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sofwave Medical and Erika Carmel, you can compare the effects of market volatilities on Sofwave Medical and Erika Carmel 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 Sofwave Medical with a short position of Erika Carmel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofwave Medical and Erika Carmel.
Diversification Opportunities for Sofwave Medical and Erika Carmel
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sofwave and Erika is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sofwave Medical and Erika Carmel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erika Carmel and Sofwave Medical 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 Sofwave Medical are associated (or correlated) with Erika Carmel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erika Carmel has no effect on the direction of Sofwave Medical i.e., Sofwave Medical and Erika Carmel go up and down completely randomly.
Pair Corralation between Sofwave Medical and Erika Carmel
Assuming the 90 days trading horizon Sofwave Medical is expected to under-perform the Erika Carmel. In addition to that, Sofwave Medical is 1.23 times more volatile than Erika Carmel. It trades about -0.16 of its total potential returns per unit of risk. Erika Carmel is currently generating about 0.1 per unit of volatility. If you would invest 2,220 in Erika Carmel on November 28, 2024 and sell it today you would earn a total of 80.00 from holding Erika Carmel or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sofwave Medical vs. Erika Carmel
Performance |
| Timeline |
| Sofwave Medical |
| Erika Carmel |
Sofwave Medical and Erika Carmel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sofwave Medical and Erika Carmel
The main advantage of trading using opposite Sofwave Medical and Erika Carmel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofwave Medical position performs unexpectedly, Erika Carmel 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 Erika Carmel will offset losses from the drop in Erika Carmel's long position.| Sofwave Medical vs. Seach Medical Group | Sofwave Medical vs. Clal Biotechnology Industries | Sofwave Medical vs. Global Knafaim Leasing | Sofwave Medical vs. Shagrir Group Vehicle |
| Erika Carmel vs. Alrov Properties Lodgings | Erika Carmel vs. Epitomee Medical | Erika Carmel vs. ICL Israel Chemicals | Erika Carmel vs. Harel Insurance Investments |
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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