Correlation Between Afi Properties and Alony Hetz
Can any of the company-specific risk be diversified away by investing in both Afi Properties 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 Afi Properties and Alony Hetz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afi Properties and Alony Hetz Properties, you can compare the effects of market volatilities on Afi Properties 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 Afi Properties with a short position of Alony Hetz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afi Properties and Alony Hetz.
Diversification Opportunities for Afi Properties and Alony Hetz
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Afi and Alony is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Afi Properties 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 Afi Properties 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 Afi Properties 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 Afi Properties i.e., Afi Properties and Alony Hetz go up and down completely randomly.
Pair Corralation between Afi Properties and Alony Hetz
Assuming the 90 days trading horizon Afi Properties is expected to under-perform the Alony Hetz. But the stock apears to be less risky and, when comparing its historical volatility, Afi Properties is 1.51 times less risky than Alony Hetz. The stock trades about -0.05 of its potential returns per unit of risk. The Alony Hetz Properties is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 300,000 in Alony Hetz Properties on August 30, 2024 and sell it today you would earn a total of 8,300 from holding Alony Hetz Properties or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afi Properties vs. Alony Hetz Properties
Performance |
| Timeline |
| Afi Properties |
| Alony Hetz Properties |
Afi Properties and Alony Hetz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afi Properties and Alony Hetz
The main advantage of trading using opposite Afi Properties and Alony Hetz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afi Properties 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.| Afi Properties vs. Alony Hetz Properties | Afi Properties vs. Clal Insurance Enterprises | Afi Properties vs. Electra | Afi Properties vs. Harel Insurance Investments |
Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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