Correlation Between Hilan and Tadir Gan

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

By analyzing existing cross correlation between Hilan and Tadir Gan 1993, you can compare the effects of market volatilities on Hilan and Tadir Gan 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 Hilan with a short position of Tadir Gan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilan and Tadir Gan.

Diversification Opportunities for Hilan and Tadir Gan

0.46

Correlation Coefficient

Hilan  Tadir Gan

Very weak diversification

The 3 months correlation between Hilan and Tadir is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hilan and Tadir Gan 1993 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tadir Gan 1993 and Hilan 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 Hilan are associated (or correlated) with Tadir Gan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tadir Gan 1993 has no effect on the direction of Hilan i.e., Hilan and Tadir Gan go up and down completely randomly.

Pair Corralation between Hilan and Tadir Gan

Assuming the 90 days trading horizon Hilan is expected to generate 1.66 times less return on investment than Tadir Gan. But when comparing it to its historical volatility, Hilan is 1.69 times less risky than Tadir Gan. It trades about 0.14 of its potential returns per unit of risk. Tadir Gan 1993 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  17,990  in Tadir Gan 1993 on October 25, 2024 and sell it today you would earn a total of  4,000  from holding Tadir Gan 1993 or generate 22.23% return on investment over 90 days.

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

Hilan  vs.  Tadir Gan 1993

Hilan

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hilan are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hilan sustained solid returns over the last few months and may actually be approaching a breakup point.

Tadir Gan 1993

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tadir Gan 1993 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tadir Gan sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hilan and Tadir Gan

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

The idea behind Hilan and Tadir Gan 1993 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.