Correlation Between Amot Investments and Electra Co
Can any of the company-specific risk be diversified away by investing in both Amot Investments and Electra Co 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 Amot Investments and Electra Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amot Investments and Electra Co Pr, you can compare the effects of market volatilities on Amot Investments and Electra Co 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 Amot Investments with a short position of Electra Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amot Investments and Electra Co.
Diversification Opportunities for Amot Investments and Electra Co
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amot and Electra is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Amot Investments and Electra Co Pr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electra Co Pr and Amot Investments 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 Amot Investments are associated (or correlated) with Electra Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electra Co Pr has no effect on the direction of Amot Investments i.e., Amot Investments and Electra Co go up and down completely randomly.
Pair Corralation between Amot Investments and Electra Co
Assuming the 90 days trading horizon Amot Investments is expected to generate 0.63 times more return on investment than Electra Co. However, Amot Investments is 1.58 times less risky than Electra Co. It trades about 0.03 of its potential returns per unit of risk. Electra Co Pr is currently generating about 0.02 per unit of risk. If you would invest 176,548 in Amot Investments on August 31, 2024 and sell it today you would earn a total of 23,552 from holding Amot Investments or generate 13.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amot Investments vs. Electra Co Pr
Performance |
| Timeline |
| Amot Investments |
| Electra Co Pr |
Amot Investments and Electra Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amot Investments and Electra Co
The main advantage of trading using opposite Amot Investments and Electra Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amot Investments position performs unexpectedly, Electra Co 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 Electra Co will offset losses from the drop in Electra Co's long position.| Amot Investments vs. Melisron | Amot Investments vs. Fattal 1998 Holdings | Amot Investments vs. Azrieli Group | Amot Investments vs. Clal Insurance Enterprises |
| Electra Co vs. El Al Israel | Electra Co vs. Magic Software Enterprises | Electra Co vs. Neto Malinda | Electra Co vs. Orbit Technologies |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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