Correlation Between Analyst IMS and Shagrir Group

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

By analyzing existing cross correlation between Analyst IMS Investment and Shagrir Group Vehicle, you can compare the effects of market volatilities on Analyst IMS and Shagrir Group 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 Analyst IMS with a short position of Shagrir Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analyst IMS and Shagrir Group.

Diversification Opportunities for Analyst IMS and Shagrir Group

0.9

Correlation Coefficient

Analyst IMS  Shagrir Group

Almost no diversification

The 3 months correlation between Analyst and Shagrir is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Analyst IMS Investment and Shagrir Group Vehicle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shagrir Group Vehicle and Analyst IMS 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 Analyst IMS Investment are associated (or correlated) with Shagrir Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shagrir Group Vehicle has no effect on the direction of Analyst IMS i.e., Analyst IMS and Shagrir Group go up and down completely randomly.

Pair Corralation between Analyst IMS and Shagrir Group

Assuming the 90 days trading horizon Analyst IMS is expected to generate 1.03 times less return on investment than Shagrir Group. But when comparing it to its historical volatility, Analyst IMS Investment is 1.49 times less risky than Shagrir Group. It trades about 0.38 of its potential returns per unit of risk. Shagrir Group Vehicle is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  92,240  in Shagrir Group Vehicle on September 15, 2024 and sell it today you would earn a total of  29,260  from holding Shagrir Group Vehicle or generate 31.72% return on investment over 90 days.

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

Analyst IMS Investment  vs.  Shagrir Group Vehicle

Analyst IMS Investment

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Analyst IMS Investment are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Analyst IMS sustained solid returns over the last few months and may actually be approaching a breakup point.

Shagrir Group Vehicle

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shagrir Group Vehicle are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shagrir Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Analyst IMS and Shagrir Group

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

The idea behind Analyst IMS Investment and Shagrir Group Vehicle 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.