Correlation Between Gan Shmuel and Aran Research

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

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

Diversification Opportunities for Gan Shmuel and Aran Research

-0.04

Correlation Coefficient

Gan Shmuel  Aran Research

Good diversification

The 3 months correlation between Gan and Aran is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Gan Shmuel and Aran Research and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aran Research and Gan Shmuel 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 Gan Shmuel are associated (or correlated) with Aran Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aran Research has no effect on the direction of Gan Shmuel i.e., Gan Shmuel and Aran Research go up and down completely randomly.

Pair Corralation between Gan Shmuel and Aran Research

Assuming the 90 days trading horizon Gan Shmuel is expected to generate 1.14 times more return on investment than Aran Research. However, Gan Shmuel is 1.14 times more volatile than Aran Research and. It trades about 0.23 of its potential returns per unit of risk. Aran Research and is currently generating about 0.0 per unit of risk. If you would invest  140,055  in Gan Shmuel on September 14, 2024 and sell it today you would earn a total of  239,845  from holding Gan Shmuel or generate 171.25% return on investment over 90 days.

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

Gan Shmuel  vs.  Aran Research and

Gan Shmuel

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gan Shmuel are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gan Shmuel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aran Research

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aran Research and are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aran Research may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gan Shmuel and Aran Research

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

The idea behind Gan Shmuel and Aran Research and 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.