Correlation Between Fox Wizel and Shufersal
Can any of the company-specific risk be diversified away by investing in both Fox Wizel and Shufersal 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 Fox Wizel and Shufersal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fox Wizel and Shufersal, you can compare the effects of market volatilities on Fox Wizel and Shufersal 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 Fox Wizel with a short position of Shufersal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fox Wizel and Shufersal.
Diversification Opportunities for Fox Wizel and Shufersal
Very poor diversification
The 3 months correlation between Fox and Shufersal is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Fox Wizel and Shufersal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shufersal and Fox Wizel 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 Fox Wizel are associated (or correlated) with Shufersal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shufersal has no effect on the direction of Fox Wizel i.e., Fox Wizel and Shufersal go up and down completely randomly.
Pair Corralation between Fox Wizel and Shufersal
Assuming the 90 days trading horizon Fox Wizel is expected to under-perform the Shufersal. In addition to that, Fox Wizel is 1.11 times more volatile than Shufersal. It trades about -0.16 of its total potential returns per unit of risk. Shufersal is currently generating about 0.06 per unit of volatility. If you would invest 244,300 in Shufersal on February 24, 2024 and sell it today you would earn a total of 3,200 from holding Shufersal or generate 1.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Fox Wizel vs. Shufersal
Performance |
Timeline |
Fox Wizel |
Shufersal |
Fox Wizel and Shufersal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fox Wizel and Shufersal
The main advantage of trading using opposite Fox Wizel and Shufersal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fox Wizel position performs unexpectedly, Shufersal 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 Shufersal will offset losses from the drop in Shufersal's long position.Fox Wizel vs. Alony Hetz Properties | Fox Wizel vs. Discount Investment Corp | Fox Wizel vs. Migdal Insurance | Fox Wizel vs. Bezeq Israeli Telecommunication |
Shufersal vs. Neto ME Holdings | Shufersal vs. Aryt Industries | Shufersal vs. Kerur Holdings | Shufersal vs. Scope Metals Group |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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