Correlation Between Strauss and M Yochananof

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

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

Diversification Opportunities for Strauss and M Yochananof

0.26

Correlation Coefficient

Strauss  M Yochananof

Modest diversification

The 3 months correlation between Strauss and YHNF is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Strauss Group and M Yochananof and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Yochananof and Strauss 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 Strauss Group are associated (or correlated) with M Yochananof. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Yochananof has no effect on the direction of Strauss i.e., Strauss and M Yochananof go up and down completely randomly.

Pair Corralation between Strauss and M Yochananof

Assuming the 90 days trading horizon Strauss Group is expected to generate 0.92 times more return on investment than M Yochananof. However, Strauss Group is 1.08 times less risky than M Yochananof. It trades about 0.18 of its potential returns per unit of risk. M Yochananof and is currently generating about 0.04 per unit of risk. If you would invest  672,041  in Strauss Group on December 30, 2024 and sell it today you would earn a total of  107,959  from holding Strauss Group or generate 16.06% return on investment over 90 days.

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

Strauss Group  vs.  M Yochananof and

Strauss Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Strauss Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Strauss sustained solid returns over the last few months and may actually be approaching a breakup point.

M Yochananof

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in M Yochananof and are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, M Yochananof is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Strauss and M Yochananof

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

The idea behind Strauss Group and M Yochananof and 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.