Correlation Between Bet Shemesh and Ashot Ashkelon
Can any of the company-specific risk be diversified away by investing in both Bet Shemesh and Ashot Ashkelon 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 Bet Shemesh and Ashot Ashkelon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bet Shemesh Engines and Ashot Ashkelon Industries, you can compare the effects of market volatilities on Bet Shemesh and Ashot Ashkelon 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 Bet Shemesh with a short position of Ashot Ashkelon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet Shemesh and Ashot Ashkelon.
Diversification Opportunities for Bet Shemesh and Ashot Ashkelon
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bet and Ashot is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bet Shemesh Engines and Ashot Ashkelon Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashot Ashkelon Industries and Bet Shemesh 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 Bet Shemesh Engines are associated (or correlated) with Ashot Ashkelon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashot Ashkelon Industries has no effect on the direction of Bet Shemesh i.e., Bet Shemesh and Ashot Ashkelon go up and down completely randomly.
Pair Corralation between Bet Shemesh and Ashot Ashkelon
Assuming the 90 days trading horizon Bet Shemesh Engines is expected to generate 1.05 times more return on investment than Ashot Ashkelon. However, Bet Shemesh is 1.05 times more volatile than Ashot Ashkelon Industries. It trades about 0.15 of its potential returns per unit of risk. Ashot Ashkelon Industries is currently generating about 0.13 per unit of risk. If you would invest 781,229 in Bet Shemesh Engines on November 2, 2024 and sell it today you would earn a total of 3,398,771 from holding Bet Shemesh Engines or generate 435.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bet Shemesh Engines vs. Ashot Ashkelon Industries
Performance |
| Timeline |
| Bet Shemesh Engines |
| Ashot Ashkelon Industries |
Bet Shemesh and Ashot Ashkelon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bet Shemesh and Ashot Ashkelon
The main advantage of trading using opposite Bet Shemesh and Ashot Ashkelon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet Shemesh position performs unexpectedly, Ashot Ashkelon 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 Ashot Ashkelon will offset losses from the drop in Ashot Ashkelon's long position.| Bet Shemesh vs. Danel | Bet Shemesh vs. Hilan | Bet Shemesh vs. Fattal 1998 Holdings | Bet Shemesh vs. Elbit Systems |
| Ashot Ashkelon vs. Bet Shemesh Engines | Ashot Ashkelon vs. Elbit Systems | Ashot Ashkelon vs. Bezeq Israeli Telecommunication | Ashot Ashkelon vs. Rekah Pharmaceutical Industry |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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