Correlation Between Gan Shmuel and MEITAV INVESTMENTS

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

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

Diversification Opportunities for Gan Shmuel and MEITAV INVESTMENTS

0.81

Correlation Coefficient

Gan Shmuel  MEITAV INVESTMENTS

Very poor diversification

The 3 months correlation between Gan and MEITAV is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Gan Shmuel and MEITAV INVESTMENTS HOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEITAV INVESTMENTS HOUSE 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 MEITAV INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEITAV INVESTMENTS HOUSE has no effect on the direction of Gan Shmuel i.e., Gan Shmuel and MEITAV INVESTMENTS go up and down completely randomly.

Pair Corralation between Gan Shmuel and MEITAV INVESTMENTS

Assuming the 90 days trading horizon Gan Shmuel is expected to generate 5.18 times less return on investment than MEITAV INVESTMENTS. But when comparing it to its historical volatility, Gan Shmuel is 1.8 times less risky than MEITAV INVESTMENTS. It trades about 0.24 of its potential returns per unit of risk. MEITAV INVESTMENTS HOUSE is currently generating about 0.69 of returns per unit of risk over similar time horizon. If you would invest  204,834  in MEITAV INVESTMENTS HOUSE on September 13, 2024 and sell it today you would earn a total of  90,866  from holding MEITAV INVESTMENTS HOUSE or generate 44.36% return on investment over 90 days.

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

Gan Shmuel  vs.  MEITAV INVESTMENTS HOUSE

Gan Shmuel

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gan Shmuel are ranked lower than 9 (%) 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.

MEITAV INVESTMENTS HOUSE

Risk-Adjusted Performance

35 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in MEITAV INVESTMENTS HOUSE are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MEITAV INVESTMENTS sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gan Shmuel and MEITAV INVESTMENTS

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

The idea behind Gan Shmuel and MEITAV INVESTMENTS HOUSE 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.