Correlation Between Alony Hetz and Shufersal

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

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

Diversification Opportunities for Alony Hetz and Shufersal

0.87

Correlation Coefficient

Alony Hetz  Shufersal

Very poor diversification

The 3 months correlation between Alony and Shufersal is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Alony Hetz Properties and Shufersal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shufersal and Alony Hetz 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 Alony Hetz Properties are associated (or correlated) with Shufersal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shufersal has no effect on the direction of Alony Hetz i.e., Alony Hetz and Shufersal go up and down completely randomly.

Pair Corralation between Alony Hetz and Shufersal

Assuming the 90 days trading horizon Alony Hetz is expected to generate 1.88 times less return on investment than Shufersal. In addition to that, Alony Hetz is 1.57 times more volatile than Shufersal. It trades about 0.08 of its total potential returns per unit of risk. Shufersal is currently generating about 0.25 per unit of volatility. If you would invest  315,200  in Shufersal on September 5, 2024 and sell it today you would earn a total of  57,800  from holding Shufersal or generate 18.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	97.83%
Values	Daily Returns

Alony Hetz Properties  vs.  Shufersal

Alony Hetz Properties

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alony Hetz Properties are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Alony Hetz sustained solid returns over the last few months and may actually be approaching a breakup point.

Shufersal

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shufersal are ranked lower than 19 (%) 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.

Pair Trading with Alony Hetz and Shufersal

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

The idea behind Alony Hetz Properties and Shufersal 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.