Correlation Between Alony Hetz and RSL Electronics
Can any of the company-specific risk be diversified away by investing in both Alony Hetz and RSL Electronics 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 RSL Electronics 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 RSL Electronics, you can compare the effects of market volatilities on Alony Hetz and RSL Electronics 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 RSL Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alony Hetz and RSL Electronics.
Diversification Opportunities for Alony Hetz and RSL Electronics
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alony and RSL is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Alony Hetz Properties and RSL Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RSL Electronics 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 RSL Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RSL Electronics has no effect on the direction of Alony Hetz i.e., Alony Hetz and RSL Electronics go up and down completely randomly.
Pair Corralation between Alony Hetz and RSL Electronics
Assuming the 90 days trading horizon Alony Hetz is expected to generate 2.1 times less return on investment than RSL Electronics. But when comparing it to its historical volatility, Alony Hetz Properties is 1.27 times less risky than RSL Electronics. It trades about 0.11 of its potential returns per unit of risk. RSL Electronics is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 70,750 in RSL Electronics on August 29, 2024 and sell it today you would earn a total of 6,250 from holding RSL Electronics or generate 8.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alony Hetz Properties vs. RSL Electronics
Performance |
| Timeline |
| Alony Hetz Properties |
| RSL Electronics |
Alony Hetz and RSL Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alony Hetz and RSL Electronics
The main advantage of trading using opposite Alony Hetz and RSL Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alony Hetz position performs unexpectedly, RSL Electronics 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 RSL Electronics will offset losses from the drop in RSL Electronics' long position.| Alony Hetz vs. Amot Investments | Alony Hetz vs. Azrieli Group | Alony Hetz vs. Melisron | Alony Hetz vs. Israel Discount Bank |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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