Correlation Between Kerur Holdings and Shufersal

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

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

Diversification Opportunities for Kerur Holdings and Shufersal

0.71

Correlation Coefficient

Kerur Holdings  Shufersal

Poor diversification

The 3 months correlation between Kerur and Shufersal is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kerur Holdings and Shufersal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shufersal and Kerur Holdings 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 Kerur Holdings are associated (or correlated) with Shufersal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shufersal has no effect on the direction of Kerur Holdings i.e., Kerur Holdings and Shufersal go up and down completely randomly.

Pair Corralation between Kerur Holdings and Shufersal

Assuming the 90 days trading horizon Kerur Holdings is expected to generate 1.05 times less return on investment than Shufersal. In addition to that, Kerur Holdings is 1.21 times more volatile than Shufersal. It trades about 0.2 of its total potential returns per unit of risk. Shufersal is currently generating about 0.25 per unit of volatility. If you would invest  315,200  in Shufersal on September 5, 2024 and sell it today you would earn a total of  57,800  from holding Shufersal or generate 18.34% return on investment over 90 days.

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

Kerur Holdings  vs.  Shufersal

Kerur Holdings

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kerur Holdings are ranked lower than 15 (%) 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.

Shufersal

Risk-Adjusted Performance

19 of 100

Solid

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

Pair Trading with Kerur Holdings and Shufersal

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

The idea behind Kerur Holdings and Shufersal 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.