Correlation Between Amot Investments and Scope Metals
Can any of the company-specific risk be diversified away by investing in both Amot Investments and Scope Metals 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 Scope Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amot Investments and Scope Metals Group, you can compare the effects of market volatilities on Amot Investments and Scope Metals 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 Scope Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amot Investments and Scope Metals.
Diversification Opportunities for Amot Investments and Scope Metals
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amot and Scope is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Amot Investments and Scope Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scope Metals Group 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 Scope Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scope Metals Group has no effect on the direction of Amot Investments i.e., Amot Investments and Scope Metals go up and down completely randomly.
Pair Corralation between Amot Investments and Scope Metals
Assuming the 90 days trading horizon Amot Investments is expected to generate 1.2 times less return on investment than Scope Metals. But when comparing it to its historical volatility, Amot Investments is 1.9 times less risky than Scope Metals. It trades about 0.63 of its potential returns per unit of risk. Scope Metals Group is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 1,165,000 in Scope Metals Group on August 29, 2024 and sell it today you would earn a total of 253,000 from holding Scope Metals Group or generate 21.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Amot Investments vs. Scope Metals Group
Performance |
| Timeline |
| Amot Investments |
| Scope Metals Group |
Amot Investments and Scope Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amot Investments and Scope Metals
The main advantage of trading using opposite Amot Investments and Scope Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amot Investments position performs unexpectedly, Scope Metals 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 Scope Metals will offset losses from the drop in Scope Metals' long position.| Amot Investments vs. Israel Canada | Amot Investments vs. Azrieli Group | Amot Investments vs. Delek Group | Amot Investments vs. Israel Discount Bank |
| Scope Metals vs. Kerur Holdings | Scope Metals vs. Neto ME Holdings | Scope Metals vs. Bank Leumi Le Israel | Scope Metals vs. Opal Balance |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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