Correlation Between Baran and El Mor
Can any of the company-specific risk be diversified away by investing in both Baran and El Mor 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 Baran and El Mor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baran Group and El Mor Electric Installation, you can compare the effects of market volatilities on Baran and El Mor 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 Baran with a short position of El Mor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baran and El Mor.
Diversification Opportunities for Baran and El Mor
Very weak diversification
The 3 months correlation between Baran and ELMR is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Baran Group and El Mor Electric Installation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Mor Electric and Baran 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 Baran Group are associated (or correlated) with El Mor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Mor Electric has no effect on the direction of Baran i.e., Baran and El Mor go up and down completely randomly.
Pair Corralation between Baran and El Mor
Assuming the 90 days trading horizon Baran is expected to generate 1.14 times less return on investment than El Mor. In addition to that, Baran is 1.17 times more volatile than El Mor Electric Installation. It trades about 0.05 of its total potential returns per unit of risk. El Mor Electric Installation is currently generating about 0.06 per unit of volatility. If you would invest 85,460 in El Mor Electric Installation on January 20, 2024 and sell it today you would earn a total of 18,240 from holding El Mor Electric Installation or generate 21.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baran Group vs. El Mor Electric Installation
Performance |
| Timeline |
| Baran Group |
| El Mor Electric |
Baran and El Mor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baran and El Mor
The main advantage of trading using opposite Baran and El Mor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baran position performs unexpectedly, El Mor 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 El Mor will offset losses from the drop in El Mor's long position.| Baran vs. EN Shoham Business | Baran vs. Accel Solutions Group | Baran vs. Mivtach Shamir | Baran vs. Rani Zim Shopping |
| El Mor vs. EN Shoham Business | El Mor vs. Accel Solutions Group | El Mor vs. Mivtach Shamir | El Mor vs. Rani Zim Shopping |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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