Correlation Between Gan Shmuel and Levinski Ofer

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

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

Diversification Opportunities for Gan Shmuel and Levinski Ofer

-0.54

Correlation Coefficient

Gan Shmuel  Levinski Ofer

Excellent diversification

The 3 months correlation between Gan and Levinski is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Gan Shmuel and Levinski Ofer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levinski Ofer 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 Levinski Ofer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Levinski Ofer has no effect on the direction of Gan Shmuel i.e., Gan Shmuel and Levinski Ofer go up and down completely randomly.

Pair Corralation between Gan Shmuel and Levinski Ofer

Assuming the 90 days trading horizon Gan Shmuel is expected to under-perform the Levinski Ofer. But the stock apears to be less risky and, when comparing its historical volatility, Gan Shmuel is 2.84 times less risky than Levinski Ofer. The stock trades about -0.17 of its potential returns per unit of risk. The Levinski Ofer is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  28,700  in Levinski Ofer on December 30, 2024 and sell it today you would earn a total of  23,600  from holding Levinski Ofer or generate 82.23% return on investment over 90 days.

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

Gan Shmuel  vs.  Levinski Ofer

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.

Levinski Ofer

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Levinski Ofer are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Levinski Ofer sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gan Shmuel and Levinski Ofer

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

The idea behind Gan Shmuel and Levinski Ofer 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.