Correlation Between Menora Miv and Kafrit

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

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

Diversification Opportunities for Menora Miv and Kafrit

0.02

Correlation Coefficient

Menora Miv  Kafrit

Significant diversification

The 3 months correlation between Menora and Kafrit is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Menora Miv Hld and Kafrit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kafrit and Menora Miv 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 Menora Miv Hld are associated (or correlated) with Kafrit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kafrit has no effect on the direction of Menora Miv i.e., Menora Miv and Kafrit go up and down completely randomly.

Pair Corralation between Menora Miv and Kafrit

Assuming the 90 days trading horizon Menora Miv Hld is expected to generate 0.78 times more return on investment than Kafrit. However, Menora Miv Hld is 1.29 times less risky than Kafrit. It trades about 0.22 of its potential returns per unit of risk. Kafrit is currently generating about -0.03 per unit of risk. If you would invest  1,468,715  in Menora Miv Hld on December 31, 2024 and sell it today you would earn a total of  411,285  from holding Menora Miv Hld or generate 28.0% return on investment over 90 days.

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

Menora Miv Hld  vs.  Kafrit

Menora Miv Hld

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Menora Miv Hld are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Menora Miv sustained solid returns over the last few months and may actually be approaching a breakup point.

Kafrit

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kafrit has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kafrit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Menora Miv and Kafrit

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

The idea behind Menora Miv Hld and Kafrit 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.