Correlation Between Gan Shmuel and Opal Balance

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

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

Diversification Opportunities for Gan Shmuel and Opal Balance

0.9

Correlation Coefficient

Gan Shmuel  Opal Balance

Almost no diversification

The 3 months correlation between Gan and Opal is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Gan Shmuel and Opal Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opal Balance 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 Opal Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opal Balance has no effect on the direction of Gan Shmuel i.e., Gan Shmuel and Opal Balance go up and down completely randomly.

Pair Corralation between Gan Shmuel and Opal Balance

Assuming the 90 days trading horizon Gan Shmuel is expected to generate 1.22 times less return on investment than Opal Balance. In addition to that, Gan Shmuel is 1.14 times more volatile than Opal Balance. It trades about 0.18 of its total potential returns per unit of risk. Opal Balance is currently generating about 0.25 per unit of volatility. If you would invest  16,618  in Opal Balance on September 5, 2024 and sell it today you would earn a total of  3,022  from holding Opal Balance or generate 18.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	97.83%
Values	Daily Returns

Gan Shmuel  vs.  Opal Balance

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.

Opal Balance

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Opal Balance are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Opal Balance sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gan Shmuel and Opal Balance

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

The idea behind Gan Shmuel and Opal Balance 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.