Correlation Between Gan Shmuel and Imperium Group

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

By analyzing existing cross correlation between Gan Shmuel and Imperium Group Global, you can compare the effects of market volatilities on Gan Shmuel and Imperium Group 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 Imperium Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gan Shmuel and Imperium Group.

Diversification Opportunities for Gan Shmuel and Imperium Group

0.62

Correlation Coefficient

Gan Shmuel  Imperium Group

Poor diversification

The 3 months correlation between Gan and Imperium is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Gan Shmuel and Imperium Group Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperium Group Global 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 Imperium Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperium Group Global has no effect on the direction of Gan Shmuel i.e., Gan Shmuel and Imperium Group go up and down completely randomly.

Pair Corralation between Gan Shmuel and Imperium Group

Assuming the 90 days trading horizon Gan Shmuel is expected to generate 3.82 times less return on investment than Imperium Group. But when comparing it to its historical volatility, Gan Shmuel is 5.08 times less risky than Imperium Group. It trades about 0.18 of its potential returns per unit of risk. Imperium Group Global is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  28.00  in Imperium Group Global on August 31, 2024 and sell it today you would earn a total of  19.00  from holding Imperium Group Global or generate 67.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	73.02%
Values	Daily Returns

Gan Shmuel  vs.  Imperium Group Global

Gan Shmuel

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gan Shmuel are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gan Shmuel sustained solid returns over the last few months and may actually be approaching a breakup point.

Imperium Group Global

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Imperium Group Global are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Imperium Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gan Shmuel and Imperium Group

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

The idea behind Gan Shmuel and Imperium Group Global 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.