Correlation Between Rapac Communication and Mivtach Shamir

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

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

Diversification Opportunities for Rapac Communication and Mivtach Shamir

0.8

Correlation Coefficient

Rapac Communication  Mivtach Shamir

Very poor diversification

The 3 months correlation between Rapac and Mivtach is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Rapac Communication Infrastruc and Mivtach Shamir in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mivtach Shamir and Rapac Communication 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 Rapac Communication Infrastructure are associated (or correlated) with Mivtach Shamir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mivtach Shamir has no effect on the direction of Rapac Communication i.e., Rapac Communication and Mivtach Shamir go up and down completely randomly.

Pair Corralation between Rapac Communication and Mivtach Shamir

Assuming the 90 days trading horizon Rapac Communication Infrastructure is expected to under-perform the Mivtach Shamir. But the stock apears to be less risky and, when comparing its historical volatility, Rapac Communication Infrastructure is 1.56 times less risky than Mivtach Shamir. The stock trades about -0.01 of its potential returns per unit of risk. The Mivtach Shamir is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,694,000  in Mivtach Shamir on September 2, 2024 and sell it today you would earn a total of  104,000  from holding Mivtach Shamir or generate 6.14% return on investment over 90 days.

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

Rapac Communication Infrastruc  vs.  Mivtach Shamir

Rapac Communication

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mivtach Shamir

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mivtach Shamir are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mivtach Shamir may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Rapac Communication and Mivtach Shamir

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

The idea behind Rapac Communication Infrastructure and Mivtach Shamir 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 CEOs Directory module to screen CEOs from public companies around the world.