Correlation Between Strauss and Carmit
Can any of the company-specific risk be diversified away by investing in both Strauss and Carmit 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 Strauss and Carmit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strauss Group and Carmit, you can compare the effects of market volatilities on Strauss and Carmit 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 Strauss with a short position of Carmit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strauss and Carmit.
Diversification Opportunities for Strauss and Carmit
Poor diversification
The 3 months correlation between Strauss and Carmit is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Strauss Group and Carmit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carmit and Strauss 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 Strauss Group are associated (or correlated) with Carmit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carmit has no effect on the direction of Strauss i.e., Strauss and Carmit go up and down completely randomly.
Pair Corralation between Strauss and Carmit
Assuming the 90 days trading horizon Strauss Group is expected to generate 2.34 times more return on investment than Carmit. However, Strauss is 2.34 times more volatile than Carmit. It trades about 0.19 of its potential returns per unit of risk. Carmit is currently generating about 0.0 per unit of risk. If you would invest 627,400 in Strauss Group on August 31, 2024 and sell it today you would earn a total of 62,400 from holding Strauss Group or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strauss Group vs. Carmit
Performance |
| Timeline |
| Strauss Group |
| Carmit |
Strauss and Carmit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strauss and Carmit
The main advantage of trading using opposite Strauss and Carmit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strauss position performs unexpectedly, Carmit 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 Carmit will offset losses from the drop in Carmit's long position.| Strauss vs. Shufersal | Strauss vs. Israel Discount Bank | Strauss vs. Bank Leumi Le Israel | Strauss vs. Azrieli Group |
| Carmit vs. Neto ME Holdings | Carmit vs. Kerur Holdings | Carmit vs. Salomon A Angel | Carmit vs. Sano Brunos Enterprises |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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