Correlation Between Mivtach Shamir and Lesico

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

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

Diversification Opportunities for Mivtach Shamir and Lesico

-0.34

Correlation Coefficient

Mivtach Shamir  Lesico

Very good diversification

The 3 months correlation between Mivtach and Lesico is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mivtach Shamir and Lesico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesico and Mivtach Shamir 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 Mivtach Shamir are associated (or correlated) with Lesico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lesico has no effect on the direction of Mivtach Shamir i.e., Mivtach Shamir and Lesico go up and down completely randomly.

Pair Corralation between Mivtach Shamir and Lesico

Assuming the 90 days trading horizon Mivtach Shamir is expected to generate 0.84 times more return on investment than Lesico. However, Mivtach Shamir is 1.19 times less risky than Lesico. It trades about 0.24 of its potential returns per unit of risk. Lesico is currently generating about -0.07 per unit of risk. If you would invest  1,826,000  in Mivtach Shamir on December 30, 2024 and sell it today you would earn a total of  487,000  from holding Mivtach Shamir or generate 26.67% return on investment over 90 days.

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

Mivtach Shamir  vs.  Lesico

Mivtach Shamir

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mivtach Shamir are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mivtach Shamir sustained solid returns over the last few months and may actually be approaching a breakup point.

Lesico

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lesico has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Mivtach Shamir and Lesico

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

The idea behind Mivtach Shamir and Lesico 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.