Correlation Between MEITAV INVESTMENTS and Gan Shmuel

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

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

Diversification Opportunities for MEITAV INVESTMENTS and Gan Shmuel

-0.76

Correlation Coefficient

MEITAV INVESTMENTS  Gan Shmuel

Pay attention - limited upside

The 3 months correlation between MEITAV and Gan is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding MEITAV INVESTMENTS HOUSE and Gan Shmuel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan Shmuel and MEITAV INVESTMENTS 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 MEITAV INVESTMENTS HOUSE are associated (or correlated) with Gan Shmuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan Shmuel has no effect on the direction of MEITAV INVESTMENTS i.e., MEITAV INVESTMENTS and Gan Shmuel go up and down completely randomly.

Pair Corralation between MEITAV INVESTMENTS and Gan Shmuel

Assuming the 90 days trading horizon MEITAV INVESTMENTS HOUSE is expected to generate 1.03 times more return on investment than Gan Shmuel. However, MEITAV INVESTMENTS is 1.03 times more volatile than Gan Shmuel. It trades about 0.34 of its potential returns per unit of risk. Gan Shmuel is currently generating about -0.17 per unit of risk. If you would invest  291,339  in MEITAV INVESTMENTS HOUSE on December 29, 2024 and sell it today you would earn a total of  149,661  from holding MEITAV INVESTMENTS HOUSE or generate 51.37% return on investment over 90 days.

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

MEITAV INVESTMENTS HOUSE  vs.  Gan Shmuel

MEITAV INVESTMENTS HOUSE

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in MEITAV INVESTMENTS HOUSE are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MEITAV INVESTMENTS sustained solid returns over the last few months and may actually be approaching a breakup point.

Gan Shmuel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gan Shmuel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with MEITAV INVESTMENTS and Gan Shmuel

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

The idea behind MEITAV INVESTMENTS HOUSE and Gan Shmuel 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.