Correlation Between EN Shoham and Suny Cellular

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

Diversification Opportunities for EN Shoham and Suny Cellular

0.05

Correlation Coefficient

EN Shoham  Suny Cellular

Significant diversification

The 3 months correlation between SHOM and Suny is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding EN Shoham Business and Suny Cellular Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suny Cellular Commun 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 Suny Cellular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suny Cellular Commun has no effect on the direction of EN Shoham i.e., EN Shoham and Suny Cellular go up and down completely randomly.

Pair Corralation between EN Shoham and Suny Cellular

Assuming the 90 days trading horizon EN Shoham Business is expected to generate 0.97 times more return on investment than Suny Cellular. However, EN Shoham Business is 1.03 times less risky than Suny Cellular. It trades about 0.24 of its potential returns per unit of risk. Suny Cellular Communication is currently generating about 0.09 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

EN Shoham Business  vs.  Suny Cellular Communication

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.

Suny Cellular Commun

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Suny Cellular Communication are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Suny Cellular may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with EN Shoham and Suny Cellular

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

The idea behind EN Shoham Business and Suny Cellular Communication 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.