Correlation Between El Mor and Shikun Binui
Can any of the company-specific risk be diversified away by investing in both El Mor and Shikun Binui 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 El Mor and Shikun Binui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between El Mor Electric Installation and Shikun Binui, you can compare the effects of market volatilities on El Mor and Shikun Binui 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 El Mor with a short position of Shikun Binui. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Mor and Shikun Binui.
Diversification Opportunities for El Mor and Shikun Binui
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between ELMR and Shikun is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding El Mor Electric Installation and Shikun Binui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shikun Binui and El Mor 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 El Mor Electric Installation are associated (or correlated) with Shikun Binui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shikun Binui has no effect on the direction of El Mor i.e., El Mor and Shikun Binui go up and down completely randomly.
Pair Corralation between El Mor and Shikun Binui
Assuming the 90 days trading horizon El Mor Electric Installation is expected to generate 0.53 times more return on investment than Shikun Binui. However, El Mor Electric Installation is 1.88 times less risky than Shikun Binui. It trades about 0.0 of its potential returns per unit of risk. Shikun Binui is currently generating about -0.04 per unit of risk. If you would invest 108,625 in El Mor Electric Installation on January 25, 2024 and sell it today you would lose (4,925) from holding El Mor Electric Installation or give up 4.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
El Mor Electric Installation vs. Shikun Binui
Performance |
| Timeline |
| El Mor Electric |
| Shikun Binui |
El Mor and Shikun Binui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Mor and Shikun Binui
The main advantage of trading using opposite El Mor and Shikun Binui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Mor position performs unexpectedly, Shikun Binui 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 Shikun Binui will offset losses from the drop in Shikun Binui's long position.The idea behind El Mor Electric Installation and Shikun Binui 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.| Shikun Binui vs. Al Bad Massuot Yitzhak | Shikun Binui vs. Gan Shmuel | Shikun Binui vs. Analyst IMS 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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