Correlation Between Arena Star and Mivne Real

Can any of the company-specific risk be diversified away by investing in both Arena Star and Mivne Real 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 Arena Star and Mivne Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arena Star Group and Mivne Real Estate, you can compare the effects of market volatilities on Arena Star and Mivne Real 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 Arena Star with a short position of Mivne Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arena Star and Mivne Real.

Diversification Opportunities for Arena Star and Mivne Real

-0.46

Correlation Coefficient

Arena Star  Mivne Real

Very good diversification

The 3 months correlation between Arena and Mivne is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Arena Star Group and Mivne Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mivne Real Estate and Arena Star 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 Arena Star Group are associated (or correlated) with Mivne Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mivne Real Estate has no effect on the direction of Arena Star i.e., Arena Star and Mivne Real go up and down completely randomly.

Pair Corralation between Arena Star and Mivne Real

Assuming the 90 days trading horizon Arena Star Group is expected to under-perform the Mivne Real. But the stock apears to be less risky and, when comparing its historical volatility, Arena Star Group is 1.22 times less risky than Mivne Real. The stock trades about -0.1 of its potential returns per unit of risk. The Mivne Real Estate is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  95,420  in Mivne Real Estate on September 5, 2024 and sell it today you would earn a total of  14,180  from holding Mivne Real Estate or generate 14.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Arena Star Group  vs.  Mivne Real Estate

Arena Star Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arena Star Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Mivne Real Estate

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mivne Real Estate are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mivne Real sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arena Star and Mivne Real

The main advantage of trading using opposite Arena Star and Mivne Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arena Star position performs unexpectedly, Mivne Real 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 Mivne Real will offset losses from the drop in Mivne Real's long position.

The idea behind Arena Star Group and Mivne Real Estate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.