Correlation Between Sure Tech and Retailors
Can any of the company-specific risk be diversified away by investing in both Sure Tech and Retailors 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 Sure Tech and Retailors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sure Tech Investments LP and Retailors, you can compare the effects of market volatilities on Sure Tech and Retailors 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 Sure Tech with a short position of Retailors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sure Tech and Retailors.
Diversification Opportunities for Sure Tech and Retailors
Average diversification
The 3 months correlation between Sure and Retailors is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sure Tech Investments LP and Retailors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retailors and Sure Tech 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 Sure Tech Investments LP are associated (or correlated) with Retailors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retailors has no effect on the direction of Sure Tech i.e., Sure Tech and Retailors go up and down completely randomly.
Pair Corralation between Sure Tech and Retailors
Assuming the 90 days trading horizon Sure Tech is expected to generate 1.48 times less return on investment than Retailors. In addition to that, Sure Tech is 1.12 times more volatile than Retailors. It trades about 0.02 of its total potential returns per unit of risk. Retailors is currently generating about 0.04 per unit of volatility. If you would invest 590,391 in Retailors on August 29, 2024 and sell it today you would earn a total of 161,109 from holding Retailors or generate 27.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sure Tech Investments LP vs. Retailors
Performance |
| Timeline |
| Sure Tech Investments |
| Retailors |
Sure Tech and Retailors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sure Tech and Retailors
The main advantage of trading using opposite Sure Tech and Retailors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sure Tech position performs unexpectedly, Retailors 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 Retailors will offset losses from the drop in Retailors' long position.| Sure Tech vs. Meitav Dash Investments | Sure Tech vs. IBI Inv House | Sure Tech vs. Mivtach Shamir | Sure Tech vs. Emilia Devel |
| Retailors vs. Nice | Retailors vs. The Gold Bond | Retailors vs. Bank Leumi Le Israel | Retailors vs. ICL Israel Chemicals |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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