Correlation Between Isracard and Alony Hetz

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

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

Diversification Opportunities for Isracard and Alony Hetz

0.87

Correlation Coefficient

Isracard  Alony Hetz

Very poor diversification

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

Pair Corralation between Isracard and Alony Hetz

Assuming the 90 days trading horizon Isracard is expected to generate 1.29 times less return on investment than Alony Hetz. But when comparing it to its historical volatility, Isracard is 2.14 times less risky than Alony Hetz. It trades about 0.19 of its potential returns per unit of risk. Alony Hetz Properties is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  296,087  in Alony Hetz Properties on September 5, 2024 and sell it today you would earn a total of  11,913  from holding Alony Hetz Properties or generate 4.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	94.74%
Values	Daily Returns

Isracard  vs.  Alony Hetz Properties

Isracard

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Isracard are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Isracard may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Alony Hetz Properties

Risk-Adjusted Performance

6 of 100

Modest

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.

Pair Trading with Isracard and Alony Hetz

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

The idea behind Isracard and Alony Hetz Properties 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.