Correlation Between Shagrir Group and Shaniv

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

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

Diversification Opportunities for Shagrir Group and Shaniv

0.88

Correlation Coefficient

Shagrir Group  Shaniv

Very poor diversification

The 3 months correlation between Shagrir and Shaniv is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shagrir Group Vehicle and Shaniv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaniv and Shagrir Group 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 Shagrir Group Vehicle 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 Shagrir Group i.e., Shagrir Group and Shaniv go up and down completely randomly.

Pair Corralation between Shagrir Group and Shaniv

Assuming the 90 days trading horizon Shagrir Group Vehicle is expected to generate 1.27 times more return on investment than Shaniv. However, Shagrir Group is 1.27 times more volatile than Shaniv. It trades about 0.22 of its potential returns per unit of risk. Shaniv is currently generating about 0.24 per unit of risk. If you would invest  97,450  in Shagrir Group Vehicle on September 29, 2024 and sell it today you would earn a total of  24,950  from holding Shagrir Group Vehicle or generate 25.6% return on investment over 90 days.

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

Shagrir Group Vehicle  vs.  Shaniv

Shagrir Group Vehicle

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shagrir Group Vehicle are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shagrir Group 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 Shagrir Group and Shaniv

The main advantage of trading using opposite Shagrir Group and Shaniv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shagrir Group 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 Shagrir Group Vehicle 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.