Correlation Between GP Global and Mordechai Aviv

Can any of the company-specific risk be diversified away by investing in both GP Global and Mordechai Aviv 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 GP Global and Mordechai Aviv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GP Global Power and Mordechai Aviv Taasiot, you can compare the effects of market volatilities on GP Global and Mordechai Aviv 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 GP Global with a short position of Mordechai Aviv. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Global and Mordechai Aviv.

Diversification Opportunities for GP Global and Mordechai Aviv

-0.54

Correlation Coefficient

GP Global  Mordechai Aviv

Excellent diversification

The 3 months correlation between GPGB and Mordechai is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding GP Global Power and Mordechai Aviv Taasiot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mordechai Aviv Taasiot and GP Global 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 GP Global Power are associated (or correlated) with Mordechai Aviv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mordechai Aviv Taasiot has no effect on the direction of GP Global i.e., GP Global and Mordechai Aviv go up and down completely randomly.

Pair Corralation between GP Global and Mordechai Aviv

Assuming the 90 days trading horizon GP Global Power is expected to generate 0.37 times more return on investment than Mordechai Aviv. However, GP Global Power is 2.73 times less risky than Mordechai Aviv. It trades about 0.34 of its potential returns per unit of risk. Mordechai Aviv Taasiot is currently generating about -0.08 per unit of risk. If you would invest  136,200  in GP Global Power on January 30, 2024 and sell it today you would earn a total of  13,800  from holding GP Global Power or generate 10.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GP Global Power  vs.  Mordechai Aviv Taasiot

GP Global Power

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in GP Global Power are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GP Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Mordechai Aviv Taasiot

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mordechai Aviv Taasiot has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with GP Global and Mordechai Aviv

The main advantage of trading using opposite GP Global and Mordechai Aviv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP Global position performs unexpectedly, Mordechai Aviv 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 Mordechai Aviv will offset losses from the drop in Mordechai Aviv's long position.

The idea behind GP Global Power and Mordechai Aviv Taasiot 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.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.