Correlation Between Nawi Brothers and Shaniv

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

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

Diversification Opportunities for Nawi Brothers and Shaniv

0.97

Correlation Coefficient

Nawi Brothers  Shaniv

Almost no diversification

The 3 months correlation between Nawi and Shaniv is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Nawi Brothers Group and Shaniv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaniv and Nawi Brothers 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 Nawi Brothers Group 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 Nawi Brothers i.e., Nawi Brothers and Shaniv go up and down completely randomly.

Pair Corralation between Nawi Brothers and Shaniv

Assuming the 90 days trading horizon Nawi Brothers Group is expected to generate 0.69 times more return on investment than Shaniv. However, Nawi Brothers Group is 1.46 times less risky than Shaniv. It trades about 0.45 of its potential returns per unit of risk. Shaniv is currently generating about 0.19 per unit of risk. If you would invest  330,745  in Nawi Brothers Group on September 29, 2024 and sell it today you would earn a total of  53,255  from holding Nawi Brothers Group or generate 16.1% return on investment over 90 days.

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

Nawi Brothers Group  vs.  Shaniv

Nawi Brothers Group

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Nawi Brothers Group are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nawi Brothers 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 Nawi Brothers and Shaniv

The main advantage of trading using opposite Nawi Brothers and Shaniv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nawi Brothers 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 Nawi Brothers Group 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.