Correlation Between Ashot Ashkelon and Bet Shemesh
Can any of the company-specific risk be diversified away by investing in both Ashot Ashkelon and Bet Shemesh 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 Ashot Ashkelon and Bet Shemesh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashot Ashkelon Industries and Bet Shemesh Engines, you can compare the effects of market volatilities on Ashot Ashkelon and Bet Shemesh 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 Ashot Ashkelon with a short position of Bet Shemesh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashot Ashkelon and Bet Shemesh.
Diversification Opportunities for Ashot Ashkelon and Bet Shemesh
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ashot and Bet is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ashot Ashkelon Industries and Bet Shemesh Engines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bet Shemesh Engines and Ashot Ashkelon 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 Ashot Ashkelon Industries are associated (or correlated) with Bet Shemesh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bet Shemesh Engines has no effect on the direction of Ashot Ashkelon i.e., Ashot Ashkelon and Bet Shemesh go up and down completely randomly.
Pair Corralation between Ashot Ashkelon and Bet Shemesh
Assuming the 90 days trading horizon Ashot Ashkelon is expected to generate 1.35 times less return on investment than Bet Shemesh. In addition to that, Ashot Ashkelon is 1.28 times more volatile than Bet Shemesh Engines. It trades about 0.12 of its total potential returns per unit of risk. Bet Shemesh Engines is currently generating about 0.21 per unit of volatility. If you would invest 1,111,000 in Bet Shemesh Engines on August 29, 2024 and sell it today you would earn a total of 2,132,000 from holding Bet Shemesh Engines or generate 191.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashot Ashkelon Industries vs. Bet Shemesh Engines
Performance |
| Timeline |
| Ashot Ashkelon Industries |
| Bet Shemesh Engines |
Ashot Ashkelon and Bet Shemesh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashot Ashkelon and Bet Shemesh
The main advantage of trading using opposite Ashot Ashkelon and Bet Shemesh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashot Ashkelon position performs unexpectedly, Bet Shemesh 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 Bet Shemesh will offset losses from the drop in Bet Shemesh's long position.| Ashot Ashkelon vs. Bet Shemesh Engines | Ashot Ashkelon vs. Elbit Systems | Ashot Ashkelon vs. Bezeq Israeli Telecommunication | Ashot Ashkelon vs. Rekah Pharmaceutical Industry |
| Bet Shemesh vs. Danel | Bet Shemesh vs. Hilan | Bet Shemesh vs. Fattal 1998 Holdings | Bet Shemesh vs. Elbit Systems |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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