Correlation Between GODM Investments and Strauss
Can any of the company-specific risk be diversified away by investing in both GODM Investments and Strauss 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 GODM Investments and Strauss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GODM Investments and Strauss Group, you can compare the effects of market volatilities on GODM Investments and Strauss 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 GODM Investments with a short position of Strauss. Check out your portfolio center. Please also check ongoing floating volatility patterns of GODM Investments and Strauss.
Diversification Opportunities for GODM Investments and Strauss
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GODM and Strauss is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding GODM Investments and Strauss Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strauss Group and GODM Investments 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 GODM Investments are associated (or correlated) with Strauss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strauss Group has no effect on the direction of GODM Investments i.e., GODM Investments and Strauss go up and down completely randomly.
Pair Corralation between GODM Investments and Strauss
Assuming the 90 days trading horizon GODM Investments is expected to under-perform the Strauss. In addition to that, GODM Investments is 2.35 times more volatile than Strauss Group. It trades about -0.09 of its total potential returns per unit of risk. Strauss Group is currently generating about -0.01 per unit of volatility. If you would invest 698,934 in Strauss Group on January 26, 2024 and sell it today you would lose (10,634) from holding Strauss Group or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GODM Investments vs. Strauss Group
Performance |
| Timeline |
| GODM Investments |
| Strauss Group |
GODM Investments and Strauss Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GODM Investments and Strauss
The main advantage of trading using opposite GODM Investments and Strauss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GODM Investments position performs unexpectedly, Strauss 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 Strauss will offset losses from the drop in Strauss' long position.The idea behind GODM Investments and Strauss Group 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.| Strauss vs. Bezeq Israeli Telecommunication | Strauss vs. Bank Hapoalim | Strauss vs. Bank Leumi Le Israel | Strauss vs. Israel Discount Bank |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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