Correlation Between Gan Shmuel and Mordechai Aviv

Can any of the company-specific risk be diversified away by investing in both Gan Shmuel and Mordechai Aviv 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 Gan Shmuel and Mordechai Aviv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gan Shmuel and Mordechai Aviv Taasiot, you can compare the effects of market volatilities on Gan Shmuel and Mordechai Aviv 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 Gan Shmuel with a short position of Mordechai Aviv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gan Shmuel and Mordechai Aviv.

Diversification Opportunities for Gan Shmuel and Mordechai Aviv

0.75

Correlation Coefficient

Gan Shmuel  Mordechai Aviv

Poor diversification

The 3 months correlation between Gan and Mordechai is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Gan Shmuel and Mordechai Aviv Taasiot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mordechai Aviv Taasiot and Gan Shmuel 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 Gan Shmuel are associated (or correlated) with Mordechai Aviv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mordechai Aviv Taasiot has no effect on the direction of Gan Shmuel i.e., Gan Shmuel and Mordechai Aviv go up and down completely randomly.

Pair Corralation between Gan Shmuel and Mordechai Aviv

Assuming the 90 days trading horizon Gan Shmuel is expected to under-perform the Mordechai Aviv. But the stock apears to be less risky and, when comparing its historical volatility, Gan Shmuel is 1.03 times less risky than Mordechai Aviv. The stock trades about -0.17 of its potential returns per unit of risk. The Mordechai Aviv Taasiot is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  209,900  in Mordechai Aviv Taasiot on December 30, 2024 and sell it today you would lose (34,100) from holding Mordechai Aviv Taasiot or give up 16.25% of portfolio value over 90 days.

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

Gan Shmuel  vs.  Mordechai Aviv Taasiot

Gan Shmuel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gan Shmuel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Mordechai Aviv Taasiot

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mordechai Aviv Taasiot has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Gan Shmuel and Mordechai Aviv

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

The idea behind Gan Shmuel and Mordechai Aviv Taasiot 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.