Correlation Between Gan Shmuel and Kerur Holdings

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

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

Diversification Opportunities for Gan Shmuel and Kerur Holdings

0.72

Correlation Coefficient

Gan Shmuel  Kerur Holdings

Poor diversification

The 3 months correlation between Gan and Kerur is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Gan Shmuel and Kerur Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerur Holdings 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 Kerur Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerur Holdings has no effect on the direction of Gan Shmuel i.e., Gan Shmuel and Kerur Holdings go up and down completely randomly.

Pair Corralation between Gan Shmuel and Kerur Holdings

Assuming the 90 days trading horizon Gan Shmuel is expected to generate 3.18 times less return on investment than Kerur Holdings. But when comparing it to its historical volatility, Gan Shmuel is 1.42 times less risky than Kerur Holdings. It trades about 0.14 of its potential returns per unit of risk. Kerur Holdings is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  662,000  in Kerur Holdings on September 1, 2024 and sell it today you would earn a total of  95,700  from holding Kerur Holdings or generate 14.46% return on investment over 90 days.

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

Gan Shmuel  vs.  Kerur Holdings

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.

Kerur Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kerur Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kerur Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gan Shmuel and Kerur Holdings

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

The idea behind Gan Shmuel and Kerur Holdings 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.