Correlation Between Globrands and Bikurey Hasade

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

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

Diversification Opportunities for Globrands and Bikurey Hasade

0.78

Correlation Coefficient

Globrands  Bikurey Hasade

Poor diversification

The 3 months correlation between Globrands and Bikurey is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Globrands Group and Bikurey Hasade Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bikurey Hasade Holdings and Globrands 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 Globrands Group are associated (or correlated) with Bikurey Hasade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bikurey Hasade Holdings has no effect on the direction of Globrands i.e., Globrands and Bikurey Hasade go up and down completely randomly.

Pair Corralation between Globrands and Bikurey Hasade

Assuming the 90 days trading horizon Globrands Group is expected to generate 0.67 times more return on investment than Bikurey Hasade. However, Globrands Group is 1.5 times less risky than Bikurey Hasade. It trades about 0.3 of its potential returns per unit of risk. Bikurey Hasade Holdings is currently generating about 0.17 per unit of risk. If you would invest  3,941,130  in Globrands Group on September 15, 2024 and sell it today you would earn a total of  760,870  from holding Globrands Group or generate 19.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.87%
Values	Daily Returns

Globrands Group  vs.  Bikurey Hasade Holdings

Globrands Group

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Globrands Group are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Globrands sustained solid returns over the last few months and may actually be approaching a breakup point.

Bikurey Hasade Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bikurey Hasade Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bikurey Hasade sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globrands and Bikurey Hasade

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

The idea behind Globrands Group and Bikurey Hasade 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..