Correlation Between Aviv Arlon and Levinski Ofer
Can any of the company-specific risk be diversified away by investing in both Aviv Arlon and Levinski Ofer 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 Aviv Arlon and Levinski Ofer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aviv Arlon and Levinski Ofer, you can compare the effects of market volatilities on Aviv Arlon and Levinski Ofer 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 Aviv Arlon with a short position of Levinski Ofer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aviv Arlon and Levinski Ofer.
Diversification Opportunities for Aviv Arlon and Levinski Ofer
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aviv and Levinski is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Aviv Arlon and Levinski Ofer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levinski Ofer and Aviv Arlon 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 Aviv Arlon are associated (or correlated) with Levinski Ofer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Levinski Ofer has no effect on the direction of Aviv Arlon i.e., Aviv Arlon and Levinski Ofer go up and down completely randomly.
Pair Corralation between Aviv Arlon and Levinski Ofer
Assuming the 90 days trading horizon Aviv Arlon is expected to under-perform the Levinski Ofer. But the stock apears to be less risky and, when comparing its historical volatility, Aviv Arlon is 2.87 times less risky than Levinski Ofer. The stock trades about -0.15 of its potential returns per unit of risk. The Levinski Ofer is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 27,200 in Levinski Ofer on January 25, 2024 and sell it today you would earn a total of 6,240 from holding Levinski Ofer or generate 22.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aviv Arlon vs. Levinski Ofer
Performance |
| Timeline |
| Aviv Arlon |
| Levinski Ofer |
Aviv Arlon and Levinski Ofer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aviv Arlon and Levinski Ofer
The main advantage of trading using opposite Aviv Arlon and Levinski Ofer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aviv Arlon position performs unexpectedly, Levinski Ofer 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 Levinski Ofer will offset losses from the drop in Levinski Ofer's long position.The idea behind Aviv Arlon and Levinski Ofer 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.| Levinski Ofer vs. Shapir Engineering Industry | Levinski Ofer vs. Electra | Levinski Ofer vs. Shikun Binui | Levinski Ofer vs. Levinstein Eng |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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