Correlation Between Kardan Real and Tower Semiconductor

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

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

Diversification Opportunities for Kardan Real and Tower Semiconductor

0.76

Correlation Coefficient

Kardan Real  Tower Semiconductor

Poor diversification

The 3 months correlation between Kardan and Tower is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kardan Real Estate and Tower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower Semiconductor and Kardan Real 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 Kardan Real Estate are associated (or correlated) with Tower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower Semiconductor has no effect on the direction of Kardan Real i.e., Kardan Real and Tower Semiconductor go up and down completely randomly.

Pair Corralation between Kardan Real and Tower Semiconductor

Assuming the 90 days trading horizon Kardan Real Estate is expected to generate 0.79 times more return on investment than Tower Semiconductor. However, Kardan Real Estate is 1.26 times less risky than Tower Semiconductor. It trades about 0.18 of its potential returns per unit of risk. Tower Semiconductor is currently generating about 0.13 per unit of risk. If you would invest  45,750  in Kardan Real Estate on September 25, 2024 and sell it today you would earn a total of  8,650  from holding Kardan Real Estate or generate 18.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.83%
Values	Daily Returns

Kardan Real Estate  vs.  Tower Semiconductor

Kardan Real Estate

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kardan Real Estate are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kardan Real sustained solid returns over the last few months and may actually be approaching a breakup point.

Tower Semiconductor

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tower Semiconductor are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tower Semiconductor sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kardan Real and Tower Semiconductor

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

The idea behind Kardan Real Estate and Tower Semiconductor 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..