Correlation Between Hod Assaf and Rotshtein

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

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

Diversification Opportunities for Hod Assaf and Rotshtein

0.85

Correlation Coefficient

Hod Assaf  Rotshtein

Very poor diversification

The 3 months correlation between Hod and Rotshtein is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hod Assaf Industries and Rotshtein in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rotshtein and Hod Assaf 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 Hod Assaf Industries are associated (or correlated) with Rotshtein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rotshtein has no effect on the direction of Hod Assaf i.e., Hod Assaf and Rotshtein go up and down completely randomly.

Pair Corralation between Hod Assaf and Rotshtein

Assuming the 90 days trading horizon Hod Assaf is expected to generate 1.21 times less return on investment than Rotshtein. In addition to that, Hod Assaf is 1.24 times more volatile than Rotshtein. It trades about 0.04 of its total potential returns per unit of risk. Rotshtein is currently generating about 0.06 per unit of volatility. If you would invest  357,094  in Rotshtein on September 27, 2024 and sell it today you would earn a total of  225,906  from holding Rotshtein or generate 63.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.74%
Values	Daily Returns

Hod Assaf Industries  vs.  Rotshtein

Hod Assaf Industries

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hod Assaf Industries are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Hod Assaf sustained solid returns over the last few months and may actually be approaching a breakup point.

Rotshtein

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rotshtein are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Rotshtein sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hod Assaf and Rotshtein

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

The idea behind Hod Assaf Industries and Rotshtein 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.