Correlation Between Shapir Engineering and Oron Group
Can any of the company-specific risk be diversified away by investing in both Shapir Engineering 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 Shapir Engineering and Oron Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shapir Engineering Industry and Oron Group Investments, you can compare the effects of market volatilities on Shapir Engineering 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 Shapir Engineering with a short position of Oron Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shapir Engineering and Oron Group.
Diversification Opportunities for Shapir Engineering and Oron Group
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shapir and Oron is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shapir Engineering Industry 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 Shapir Engineering 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 Shapir Engineering Industry 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 Shapir Engineering i.e., Shapir Engineering and Oron Group go up and down completely randomly.
Pair Corralation between Shapir Engineering and Oron Group
Assuming the 90 days trading horizon Shapir Engineering Industry is expected to under-perform the Oron Group. But the stock apears to be less risky and, when comparing its historical volatility, Shapir Engineering Industry is 1.33 times less risky than Oron Group. The stock trades about -0.14 of its potential returns per unit of risk. The Oron Group Investments is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 100,800 in Oron Group Investments on November 4, 2024 and sell it today you would earn a total of 11,400 from holding Oron Group Investments or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shapir Engineering Industry vs. Oron Group Investments
Performance |
| Timeline |
| Shapir Engineering |
| Oron Group Investments |
Shapir Engineering and Oron Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shapir Engineering and Oron Group
The main advantage of trading using opposite Shapir Engineering and Oron Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shapir Engineering 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.| Shapir Engineering vs. Shikun Binui | Shapir Engineering vs. Elbit Systems | Shapir Engineering vs. Amot Investments | Shapir Engineering vs. Israel Discount Bank |
| Oron Group vs. Shikun Binui | Oron Group vs. Ashtrom Group | Oron Group vs. Aura Investments | Oron Group vs. Shapir Engineering Industry |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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