Correlation Between Export Inv and Shaniv

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

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

Diversification Opportunities for Export Inv and Shaniv

0.82

Correlation Coefficient

Export Inv  Shaniv

Very poor diversification

The 3 months correlation between Export and Shaniv is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Export Inv and Shaniv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaniv and Export Inv 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 Export Inv are associated (or correlated) with Shaniv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaniv has no effect on the direction of Export Inv i.e., Export Inv and Shaniv go up and down completely randomly.

Pair Corralation between Export Inv and Shaniv

Assuming the 90 days trading horizon Export Inv is expected to under-perform the Shaniv. But the stock apears to be less risky and, when comparing its historical volatility, Export Inv is 2.05 times less risky than Shaniv. The stock trades about -0.1 of its potential returns per unit of risk. The Shaniv is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  38,486  in Shaniv on September 30, 2024 and sell it today you would earn a total of  3,284  from holding Shaniv or generate 8.53% return on investment over 90 days.

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

Export Inv  vs.  Shaniv

Export Inv

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Export Inv are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Export Inv sustained solid returns over the last few months and may actually be approaching a breakup point.

Shaniv

Risk-Adjusted Performance

18 of 100

Solid

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

Pair Trading with Export Inv and Shaniv

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

The idea behind Export Inv and Shaniv 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.