Correlation Between Sofwave Medical and Oron Group
Can any of the company-specific risk be diversified away by investing in both Sofwave Medical and Oron Group 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 Oron Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sofwave Medical and Oron Group Investments, you can compare the effects of market volatilities on Sofwave Medical and Oron Group 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 Oron Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofwave Medical and Oron Group.
Diversification Opportunities for Sofwave Medical and Oron Group
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sofwave and Oron is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sofwave Medical and Oron Group Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oron Group Investments 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 Oron Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oron Group Investments has no effect on the direction of Sofwave Medical i.e., Sofwave Medical and Oron Group go up and down completely randomly.
Pair Corralation between Sofwave Medical and Oron Group
Assuming the 90 days trading horizon Sofwave Medical is expected to generate 2.4 times less return on investment than Oron Group. In addition to that, Sofwave Medical is 1.47 times more volatile than Oron Group Investments. It trades about 0.03 of its total potential returns per unit of risk. Oron Group Investments is currently generating about 0.09 per unit of volatility. If you would invest 95,940 in Oron Group Investments on September 18, 2024 and sell it today you would earn a total of 2,960 from holding Oron Group Investments or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Sofwave Medical vs. Oron Group Investments
Performance |
| Timeline |
| Sofwave Medical |
| Oron Group Investments |
Sofwave Medical and Oron Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sofwave Medical and Oron Group
The main advantage of trading using opposite Sofwave Medical and Oron Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofwave Medical position performs unexpectedly, Oron Group 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 Oron Group will offset losses from the drop in Oron Group's long position.| Sofwave Medical vs. Harel Insurance Investments | Sofwave Medical vs. Shagrir Group Vehicle | Sofwave Medical vs. Rapac Communication Infrastructure | Sofwave Medical vs. Batm Advanced Communications |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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