Correlation Between Mivtach Shamir and Rapac Communication

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

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

Diversification Opportunities for Mivtach Shamir and Rapac Communication

0.87

Correlation Coefficient

Mivtach Shamir  Rapac Communication

Very poor diversification

The 3 months correlation between Mivtach and Rapac is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Mivtach Shamir and Rapac Communication Infrastruc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rapac Communication 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 Rapac Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rapac Communication has no effect on the direction of Mivtach Shamir i.e., Mivtach Shamir and Rapac Communication go up and down completely randomly.

Pair Corralation between Mivtach Shamir and Rapac Communication

Assuming the 90 days trading horizon Mivtach Shamir is expected to generate 1.23 times less return on investment than Rapac Communication. But when comparing it to its historical volatility, Mivtach Shamir is 1.12 times less risky than Rapac Communication. It trades about 0.23 of its potential returns per unit of risk. Rapac Communication Infrastructure is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  280,000  in Rapac Communication Infrastructure on December 31, 2024 and sell it today you would earn a total of  87,500  from holding Rapac Communication Infrastructure or generate 31.25% return on investment over 90 days.

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

Mivtach Shamir  vs.  Rapac Communication Infrastruc

Mivtach Shamir

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mivtach Shamir are ranked lower than 17 (%) 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.

Rapac Communication

Risk-Adjusted Performance

Solid

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

Pair Trading with Mivtach Shamir and Rapac Communication

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

The idea behind Mivtach Shamir and Rapac Communication Infrastructure 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.