Correlation Between Opal Balance and Gan Shmuel

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

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

Diversification Opportunities for Opal Balance and Gan Shmuel

-0.25

Correlation Coefficient

Opal Balance  Gan Shmuel

Very good diversification

The 3 months correlation between Opal and Gan is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Opal Balance and Gan Shmuel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan Shmuel and Opal Balance 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 Opal Balance 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 Opal Balance i.e., Opal Balance and Gan Shmuel go up and down completely randomly.

Pair Corralation between Opal Balance and Gan Shmuel

Assuming the 90 days trading horizon Opal Balance is expected to generate 0.54 times more return on investment than Gan Shmuel. However, Opal Balance is 1.85 times less risky than Gan Shmuel. It trades about 0.14 of its potential returns per unit of risk. Gan Shmuel is currently generating about -0.35 per unit of risk. If you would invest  22,930  in Opal Balance on December 2, 2024 and sell it today you would earn a total of  870.00  from holding Opal Balance or generate 3.79% return on investment over 90 days.

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

Opal Balance  vs.  Gan Shmuel

Opal Balance

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Opal Balance are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Opal Balance 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 Opal Balance and Gan Shmuel

The main advantage of trading using opposite Opal Balance and Gan Shmuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opal Balance 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 Opal Balance 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.