Correlation Between Imperium Group and Gan Shmuel

Can any of the company-specific risk be diversified away by investing in both Imperium Group and Gan Shmuel 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 Imperium Group and Gan Shmuel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Imperium Group Global and Gan Shmuel, you can compare the effects of market volatilities on Imperium Group and Gan Shmuel 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 Imperium Group with a short position of Gan Shmuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperium Group and Gan Shmuel.

Diversification Opportunities for Imperium Group and Gan Shmuel

0.3

Correlation Coefficient

Imperium Group  Gan Shmuel

Weak diversification

The 3 months correlation between Imperium and Gan is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Imperium Group Global and Gan Shmuel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan Shmuel and Imperium Group 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 Imperium Group Global are associated (or correlated) with Gan Shmuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan Shmuel has no effect on the direction of Imperium Group i.e., Imperium Group and Gan Shmuel go up and down completely randomly.

Pair Corralation between Imperium Group and Gan Shmuel

Assuming the 90 days horizon Imperium Group Global is expected to under-perform the Gan Shmuel. In addition to that, Imperium Group is 3.07 times more volatile than Gan Shmuel. It trades about -0.05 of its total potential returns per unit of risk. Gan Shmuel is currently generating about 0.26 per unit of volatility. If you would invest  258,000  in Gan Shmuel on March 3, 2024 and sell it today you would earn a total of  31,600  from holding Gan Shmuel or generate 12.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	72.73%
Values	Daily Returns

Imperium Group Global  vs.  Gan Shmuel

Imperium Group Global

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Imperium Group Global are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Imperium Group reported solid returns over the last few months and may actually be approaching a breakup point.

Gan Shmuel

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gan Shmuel are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gan Shmuel sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Imperium Group and Gan Shmuel

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

The idea behind Imperium Group Global and Gan Shmuel 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.