Correlation Between EN Shoham and C I

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

By analyzing existing cross correlation between EN Shoham Business and C I Systems, you can compare the effects of market volatilities on EN Shoham and C I 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 EN Shoham with a short position of C I. Check out your portfolio center. Please also check ongoing floating volatility patterns of EN Shoham and C I.

Diversification Opportunities for EN Shoham and C I

0.21

Correlation Coefficient

EN Shoham  C I

Modest diversification

The 3 months correlation between SHOM and CISY is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding EN Shoham Business and C I Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C I Systems and EN Shoham 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 EN Shoham Business are associated (or correlated) with C I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C I Systems has no effect on the direction of EN Shoham i.e., EN Shoham and C I go up and down completely randomly.

Pair Corralation between EN Shoham and C I

Assuming the 90 days trading horizon EN Shoham Business is expected to generate 0.94 times more return on investment than C I. However, EN Shoham Business is 1.07 times less risky than C I. It trades about 0.43 of its potential returns per unit of risk. C I Systems is currently generating about 0.05 per unit of risk. If you would invest  53,992  in EN Shoham Business on October 1, 2024 and sell it today you would earn a total of  24,448  from holding EN Shoham Business or generate 45.28% return on investment over 90 days.

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

EN Shoham Business  vs.  C I Systems

EN Shoham Business

Risk-Adjusted Performance

33 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in EN Shoham Business are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, EN Shoham sustained solid returns over the last few months and may actually be approaching a breakup point.

C I Systems

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in C I Systems are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, C I is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with EN Shoham and C I

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

The idea behind EN Shoham Business and C I Systems 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.