Correlation Between Plasto Cargal and Formula
Can any of the company-specific risk be diversified away by investing in both Plasto Cargal and Formula 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 Plasto Cargal and Formula into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plasto Cargal Group and Formula, you can compare the effects of market volatilities on Plasto Cargal and Formula 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 Plasto Cargal with a short position of Formula. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plasto Cargal and Formula.
Diversification Opportunities for Plasto Cargal and Formula
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Plasto and Formula is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Plasto Cargal Group and Formula in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formula and Plasto Cargal 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 Plasto Cargal Group are associated (or correlated) with Formula. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formula has no effect on the direction of Plasto Cargal i.e., Plasto Cargal and Formula go up and down completely randomly.
Pair Corralation between Plasto Cargal and Formula
Assuming the 90 days trading horizon Plasto Cargal Group is expected to under-perform the Formula. In addition to that, Plasto Cargal is 1.47 times more volatile than Formula. It trades about -0.33 of its total potential returns per unit of risk. Formula is currently generating about -0.12 per unit of volatility. If you would invest 2,963,861 in Formula on January 20, 2024 and sell it today you would lose (139,861) from holding Formula or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plasto Cargal Group vs. Formula
Performance |
| Timeline |
| Plasto Cargal Group |
| Formula |
Plasto Cargal and Formula Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plasto Cargal and Formula
The main advantage of trading using opposite Plasto Cargal and Formula positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plasto Cargal position performs unexpectedly, Formula 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 Formula will offset losses from the drop in Formula's long position.| Plasto Cargal vs. MLRN Projects and | Plasto Cargal vs. Lesico | Plasto Cargal vs. Al Bad Massuot Yitzhak | Plasto Cargal vs. Ilex Medical |
| Formula vs. Automatic Bank Services | Formula vs. EN Shoham Business | Formula vs. Rapac Communication Infrastructure | Formula vs. Tadiran Hldg |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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