Correlation Between Baran and Almogim Holdings

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

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

Diversification Opportunities for Baran and Almogim Holdings

0.93

Correlation Coefficient

Baran  Almogim Holdings

Almost no diversification

The 3 months correlation between Baran and Almogim is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Baran Group and Almogim Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almogim Holdings and Baran 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 Baran Group are associated (or correlated) with Almogim Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almogim Holdings has no effect on the direction of Baran i.e., Baran and Almogim Holdings go up and down completely randomly.

Pair Corralation between Baran and Almogim Holdings

Assuming the 90 days trading horizon Baran is expected to generate 1.22 times less return on investment than Almogim Holdings. In addition to that, Baran is 1.55 times more volatile than Almogim Holdings. It trades about 0.23 of its total potential returns per unit of risk. Almogim Holdings is currently generating about 0.44 per unit of volatility. If you would invest  81,300  in Almogim Holdings on September 27, 2024 and sell it today you would earn a total of  29,200  from holding Almogim Holdings or generate 35.92% return on investment over 90 days.

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

Baran Group  vs.  Almogim Holdings

Baran Group

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Baran Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Baran sustained solid returns over the last few months and may actually be approaching a breakup point.

Almogim Holdings

Risk-Adjusted Performance

34 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Almogim Holdings are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Almogim Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Baran and Almogim Holdings

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

The idea behind Baran Group and Almogim Holdings 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.