Correlation Between GP Global and Hod Assaf

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

By analyzing existing cross correlation between GP Global Power and Hod Assaf Industries, you can compare the effects of market volatilities on GP Global and Hod Assaf 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 GP Global with a short position of Hod Assaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Global and Hod Assaf.

Diversification Opportunities for GP Global and Hod Assaf

0.0

Correlation Coefficient

GP Global  Hod Assaf

Pay attention - limited upside

The 3 months correlation between GPGB and Hod is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GP Global Power and Hod Assaf Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hod Assaf Industries and GP Global 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 GP Global Power are associated (or correlated) with Hod Assaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hod Assaf Industries has no effect on the direction of GP Global i.e., GP Global and Hod Assaf go up and down completely randomly.

Pair Corralation between GP Global and Hod Assaf

If you would invest  361,100  in Hod Assaf Industries on September 24, 2024 and sell it today you would earn a total of  143,600  from holding Hod Assaf Industries or generate 39.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GP Global Power  vs.  Hod Assaf Industries

GP Global Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GP Global Power has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, GP Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hod Assaf Industries

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hod Assaf Industries are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Hod Assaf sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GP Global and Hod Assaf

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

The idea behind GP Global Power and Hod Assaf Industries 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.