Correlation Between Alony Hetz and First International
Can any of the company-specific risk be diversified away by investing in both Alony Hetz and First International 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 Alony Hetz and First International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alony Hetz Properties and First International Bank, you can compare the effects of market volatilities on Alony Hetz and First International 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 Alony Hetz with a short position of First International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alony Hetz and First International.
Diversification Opportunities for Alony Hetz and First International
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alony and First is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Alony Hetz Properties and First International Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First International Bank and Alony Hetz 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 Alony Hetz Properties are associated (or correlated) with First International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First International Bank has no effect on the direction of Alony Hetz i.e., Alony Hetz and First International go up and down completely randomly.
Pair Corralation between Alony Hetz and First International
Assuming the 90 days trading horizon Alony Hetz Properties is expected to under-perform the First International. In addition to that, Alony Hetz is 1.57 times more volatile than First International Bank. It trades about -0.08 of its total potential returns per unit of risk. First International Bank is currently generating about 0.4 per unit of volatility. If you would invest 1,609,000 in First International Bank on August 27, 2024 and sell it today you would earn a total of 111,000 from holding First International Bank or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alony Hetz Properties vs. First International Bank
Performance |
| Timeline |
| Alony Hetz Properties |
| First International Bank |
Alony Hetz and First International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alony Hetz and First International
The main advantage of trading using opposite Alony Hetz and First International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alony Hetz position performs unexpectedly, First International 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 First International will offset losses from the drop in First International's long position.| Alony Hetz vs. Amot Investments | Alony Hetz vs. Azrieli Group | Alony Hetz vs. Melisron | Alony Hetz vs. Israel Discount Bank |
| First International vs. Israel Discount Bank | First International vs. Mizrahi Tefahot | First International vs. Bank Leumi Le Israel | First International vs. Bank Hapoalim |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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