Correlation Between EN Shoham and One Software

Can any of the company-specific risk be diversified away by investing in both EN Shoham and One Software 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 One Software 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 One Software Technologies, you can compare the effects of market volatilities on EN Shoham and One Software 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 One Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of EN Shoham and One Software.

Diversification Opportunities for EN Shoham and One Software

0.74

Correlation Coefficient

EN Shoham  One Software

Poor diversification

The 3 months correlation between SHOM and One is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding EN Shoham Business and One Software Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Software Technologies 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 One Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Software Technologies has no effect on the direction of EN Shoham i.e., EN Shoham and One Software go up and down completely randomly.

Pair Corralation between EN Shoham and One Software

Assuming the 90 days trading horizon EN Shoham Business is expected to generate 1.07 times more return on investment than One Software. However, EN Shoham is 1.07 times more volatile than One Software Technologies. It trades about 0.24 of its potential returns per unit of risk. One Software Technologies is currently generating about 0.12 per unit of risk. If you would invest  68,598  in EN Shoham Business on November 29, 2024 and sell it today you would earn a total of  18,762  from holding EN Shoham Business or generate 27.35% return on investment over 90 days.

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

EN Shoham Business  vs.  One Software Technologies

EN Shoham Business

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EN Shoham Business are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, EN Shoham sustained solid returns over the last few months and may actually be approaching a breakup point.

One Software Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in One Software Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, One Software sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EN Shoham and One Software

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

The idea behind EN Shoham Business and One Software Technologies 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.