Correlation Between Global Knafaim and EN Shoham

Can any of the company-specific risk be diversified away by investing in both Global Knafaim and EN Shoham 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 Global Knafaim and EN Shoham into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Knafaim Leasing and EN Shoham Business, you can compare the effects of market volatilities on Global Knafaim and EN Shoham 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 Global Knafaim with a short position of EN Shoham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Knafaim and EN Shoham.

Diversification Opportunities for Global Knafaim and EN Shoham

0.76

Correlation Coefficient

Global Knafaim  EN Shoham

Poor diversification

The 3 months correlation between Global and SHOM is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Global Knafaim Leasing and EN Shoham Business in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EN Shoham Business and Global Knafaim 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 Global Knafaim Leasing are associated (or correlated) with EN Shoham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EN Shoham Business has no effect on the direction of Global Knafaim i.e., Global Knafaim and EN Shoham go up and down completely randomly.

Pair Corralation between Global Knafaim and EN Shoham

Assuming the 90 days trading horizon Global Knafaim is expected to generate 2.47 times less return on investment than EN Shoham. But when comparing it to its historical volatility, Global Knafaim Leasing is 1.2 times less risky than EN Shoham. It trades about 0.01 of its potential returns per unit of risk. EN Shoham Business is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  79,800  in EN Shoham Business on December 27, 2024 and sell it today you would earn a total of  1,450  from holding EN Shoham Business or generate 1.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Global Knafaim Leasing  vs.  EN Shoham Business

Global Knafaim Leasing

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global Knafaim Leasing are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Global Knafaim is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

EN Shoham Business

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EN Shoham Business are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, EN Shoham is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Global Knafaim and EN Shoham

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

The idea behind Global Knafaim Leasing and EN Shoham Business 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..