Correlation Between EN Shoham and Amanet Management

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

By analyzing existing cross correlation between EN Shoham Business and Amanet Management Systems, you can compare the effects of market volatilities on EN Shoham and Amanet Management 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 EN Shoham with a short position of Amanet Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of EN Shoham and Amanet Management.

Diversification Opportunities for EN Shoham and Amanet Management

-0.16

Correlation Coefficient

EN Shoham  Amanet Management

Good diversification

The 3 months correlation between SHOM and Amanet is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding EN Shoham Business and Amanet Management Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amanet Management Systems and EN Shoham 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 EN Shoham Business are associated (or correlated) with Amanet Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amanet Management Systems has no effect on the direction of EN Shoham i.e., EN Shoham and Amanet Management go up and down completely randomly.

Pair Corralation between EN Shoham and Amanet Management

Assuming the 90 days trading horizon EN Shoham is expected to generate 2.02 times less return on investment than Amanet Management. But when comparing it to its historical volatility, EN Shoham Business is 1.14 times less risky than Amanet Management. It trades about 0.05 of its potential returns per unit of risk. Amanet Management Systems is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  162,600  in Amanet Management Systems on December 30, 2024 and sell it today you would earn a total of  15,400  from holding Amanet Management Systems or generate 9.47% return on investment over 90 days.

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

EN Shoham Business  vs.  Amanet Management Systems

EN Shoham Business

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EN Shoham Business are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, EN Shoham may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Amanet Management Systems

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amanet Management Systems are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amanet Management sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EN Shoham and Amanet Management

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

The idea behind EN Shoham Business and Amanet Management Systems 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.