Correlation Between Al Bad and Strauss

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

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

Diversification Opportunities for Al Bad and Strauss

0.82

Correlation Coefficient

Al Bad  Strauss

Very poor diversification

The 3 months correlation between ALBA and Strauss is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Al Bad Massuot Yitzhak and Strauss Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strauss Group and Al Bad 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 Al Bad Massuot Yitzhak are associated (or correlated) with Strauss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strauss Group has no effect on the direction of Al Bad i.e., Al Bad and Strauss go up and down completely randomly.

Pair Corralation between Al Bad and Strauss

Assuming the 90 days trading horizon Al Bad Massuot Yitzhak is expected to under-perform the Strauss. But the stock apears to be less risky and, when comparing its historical volatility, Al Bad Massuot Yitzhak is 1.35 times less risky than Strauss. The stock trades about -0.14 of its potential returns per unit of risk. The Strauss Group is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  639,500  in Strauss Group on September 15, 2024 and sell it today you would earn a total of  85,500  from holding Strauss Group or generate 13.37% return on investment over 90 days.

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

Al Bad Massuot Yitzhak  vs.  Strauss Group

Al Bad Massuot

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Al Bad Massuot Yitzhak are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Al Bad sustained solid returns over the last few months and may actually be approaching a breakup point.

Strauss Group

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Strauss Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Strauss sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Al Bad and Strauss

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

The idea behind Al Bad Massuot Yitzhak and Strauss Group 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.