Correlation Between Av Gad and Kvutzat Acro

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

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

Diversification Opportunities for Av Gad and Kvutzat Acro

0.81

Correlation Coefficient

Av Gad  Kvutzat Acro

Very poor diversification

The 3 months correlation between AVGD and Kvutzat is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Av Gad Holdings and Kvutzat Acro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kvutzat Acro and Av Gad 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 Av Gad Holdings are associated (or correlated) with Kvutzat Acro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kvutzat Acro has no effect on the direction of Av Gad i.e., Av Gad and Kvutzat Acro go up and down completely randomly.

Pair Corralation between Av Gad and Kvutzat Acro

Assuming the 90 days trading horizon Av Gad is expected to generate 1.54 times less return on investment than Kvutzat Acro. But when comparing it to its historical volatility, Av Gad Holdings is 1.08 times less risky than Kvutzat Acro. It trades about 0.21 of its potential returns per unit of risk. Kvutzat Acro is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  424,000  in Kvutzat Acro on September 15, 2024 and sell it today you would earn a total of  150,000  from holding Kvutzat Acro or generate 35.38% return on investment over 90 days.

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

Av Gad Holdings  vs.  Kvutzat Acro

Av Gad Holdings

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Av Gad Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Av Gad sustained solid returns over the last few months and may actually be approaching a breakup point.

Kvutzat Acro

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kvutzat Acro are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kvutzat Acro sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Av Gad and Kvutzat Acro

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

The idea behind Av Gad Holdings and Kvutzat Acro 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.