Correlation Between Altshuler Shaham and Generation Capital

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

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

Diversification Opportunities for Altshuler Shaham and Generation Capital

0.93

Correlation Coefficient

Altshuler Shaham  Generation Capital

Almost no diversification

The 3 months correlation between Altshuler and Generation is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Altshuler Shaham Financial and Generation Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Capital and Altshuler Shaham 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 Altshuler Shaham Financial are associated (or correlated) with Generation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Capital has no effect on the direction of Altshuler Shaham i.e., Altshuler Shaham and Generation Capital go up and down completely randomly.

Pair Corralation between Altshuler Shaham and Generation Capital

Assuming the 90 days trading horizon Altshuler Shaham Financial is expected to generate 0.94 times more return on investment than Generation Capital. However, Altshuler Shaham Financial is 1.06 times less risky than Generation Capital. It trades about 0.22 of its potential returns per unit of risk. Generation Capital is currently generating about 0.19 per unit of risk. If you would invest  50,030  in Altshuler Shaham Financial on September 15, 2024 and sell it today you would earn a total of  12,560  from holding Altshuler Shaham Financial or generate 25.1% return on investment over 90 days.

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

Altshuler Shaham Financial  vs.  Generation Capital

Altshuler Shaham Fin

Risk-Adjusted Performance

17 of 100

Solid

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

Generation Capital

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Generation Capital are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Generation Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altshuler Shaham and Generation Capital

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

The idea behind Altshuler Shaham Financial and Generation Capital 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.