Correlation Between Shufersal and Bio View

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

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

Diversification Opportunities for Shufersal and Bio View

-0.73

Correlation Coefficient

Shufersal  Bio View

Pay attention - limited upside

The 3 months correlation between Shufersal and Bio is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Shufersal and Bio View in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio View and Shufersal 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 Shufersal are associated (or correlated) with Bio View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio View has no effect on the direction of Shufersal i.e., Shufersal and Bio View go up and down completely randomly.

Pair Corralation between Shufersal and Bio View

Assuming the 90 days trading horizon Shufersal is expected to generate 0.37 times more return on investment than Bio View. However, Shufersal is 2.7 times less risky than Bio View. It trades about -0.18 of its potential returns per unit of risk. Bio View is currently generating about -0.15 per unit of risk. If you would invest  250,000  in Shufersal on February 7, 2024 and sell it today you would lose (11,000) from holding Shufersal or give up 4.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.33%
Values	Daily Returns

Shufersal  vs.  Bio View

Shufersal

Risk-Adjusted Performance

10 of 100

Good

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

Bio View

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bio View has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Shufersal and Bio View

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

The idea behind Shufersal and Bio View 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.