Correlation Between Shemen Industries and Beeio Honey

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

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

Diversification Opportunities for Shemen Industries and Beeio Honey

-0.76

Correlation Coefficient

Shemen Industries  Beeio Honey

Pay attention - limited upside

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

Pair Corralation between Shemen Industries and Beeio Honey

Assuming the 90 days trading horizon Shemen Industries is expected to generate 1.25 times less return on investment than Beeio Honey. But when comparing it to its historical volatility, Shemen Industries is 3.47 times less risky than Beeio Honey. It trades about 0.3 of its potential returns per unit of risk. Beeio Honey is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  18,560  in Beeio Honey on September 28, 2024 and sell it today you would earn a total of  1,750  from holding Beeio Honey or generate 9.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Shemen Industries  vs.  Beeio Honey

Shemen Industries

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shemen Industries are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Shemen Industries unveiled solid returns over the last few months and may actually be approaching a breakup point.

Beeio Honey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beeio Honey has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Shemen Industries and Beeio Honey

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

The idea behind Shemen Industries and Beeio Honey 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.