Correlation Between Allot Communications and Hamat
Can any of the company-specific risk be diversified away by investing in both Allot Communications and Hamat 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 Allot Communications and Hamat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allot Communications and Hamat Group, you can compare the effects of market volatilities on Allot Communications and Hamat 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 Allot Communications with a short position of Hamat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allot Communications and Hamat.
Diversification Opportunities for Allot Communications and Hamat
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Allot and Hamat is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Allot Communications and Hamat Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamat Group and Allot Communications 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 Allot Communications are associated (or correlated) with Hamat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamat Group has no effect on the direction of Allot Communications i.e., Allot Communications and Hamat go up and down completely randomly.
Pair Corralation between Allot Communications and Hamat
Assuming the 90 days trading horizon Allot Communications is expected to generate 1.82 times more return on investment than Hamat. However, Allot Communications is 1.82 times more volatile than Hamat Group. It trades about 0.3 of its potential returns per unit of risk. Hamat Group is currently generating about 0.31 per unit of risk. If you would invest 135,000 in Allot Communications on October 22, 2024 and sell it today you would earn a total of 148,100 from holding Allot Communications or generate 109.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allot Communications vs. Hamat Group
Performance |
| Timeline |
| Allot Communications |
| Hamat Group |
Allot Communications and Hamat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allot Communications and Hamat
The main advantage of trading using opposite Allot Communications and Hamat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allot Communications position performs unexpectedly, Hamat 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 Hamat will offset losses from the drop in Hamat's long position.| Allot Communications vs. Tower Semiconductor | Allot Communications vs. Nova | Allot Communications vs. Nice | Allot Communications vs. AudioCodes |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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