Correlation Between Strauss and Evogene
Can any of the company-specific risk be diversified away by investing in both Strauss and Evogene 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 Evogene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strauss Group and Evogene, you can compare the effects of market volatilities on Strauss and Evogene 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 Evogene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strauss and Evogene.
Diversification Opportunities for Strauss and Evogene
Excellent diversification
The 3 months correlation between Strauss and Evogene is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Strauss Group and Evogene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evogene 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 Evogene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evogene has no effect on the direction of Strauss i.e., Strauss and Evogene go up and down completely randomly.
Pair Corralation between Strauss and Evogene
Assuming the 90 days trading horizon Strauss Group is expected to generate 0.4 times more return on investment than Evogene. However, Strauss Group is 2.47 times less risky than Evogene. It trades about 0.01 of its potential returns per unit of risk. Evogene is currently generating about -0.06 per unit of risk. If you would invest 778,774 in Strauss Group on November 27, 2024 and sell it today you would earn a total of 9,226 from holding Strauss Group or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strauss Group vs. Evogene
Performance |
| Timeline |
| Strauss Group |
| Evogene |
Strauss and Evogene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strauss and Evogene
The main advantage of trading using opposite Strauss and Evogene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strauss position performs unexpectedly, Evogene 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 Evogene will offset losses from the drop in Evogene's long position.| Strauss vs. Shufersal | Strauss vs. Israel Discount Bank | Strauss vs. Bank Leumi Le Israel | Strauss vs. Azrieli Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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