Correlation Between Dan Hotels and Amot Investments
Can any of the company-specific risk be diversified away by investing in both Dan Hotels and Amot Investments 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 Dan Hotels and Amot Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dan Hotels and Amot Investments, you can compare the effects of market volatilities on Dan Hotels and Amot Investments 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 Dan Hotels with a short position of Amot Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dan Hotels and Amot Investments.
Diversification Opportunities for Dan Hotels and Amot Investments
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dan and Amot is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Dan Hotels and Amot Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amot Investments and Dan Hotels 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 Dan Hotels are associated (or correlated) with Amot Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amot Investments has no effect on the direction of Dan Hotels i.e., Dan Hotels and Amot Investments go up and down completely randomly.
Pair Corralation between Dan Hotels and Amot Investments
Assuming the 90 days trading horizon Dan Hotels is expected to under-perform the Amot Investments. But the stock apears to be less risky and, when comparing its historical volatility, Dan Hotels is 1.54 times less risky than Amot Investments. The stock trades about -0.24 of its potential returns per unit of risk. The Amot Investments is currently generating about 0.65 of returns per unit of risk over similar time horizon. If you would invest 167,500 in Amot Investments on August 25, 2024 and sell it today you would earn a total of 28,500 from holding Amot Investments or generate 17.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dan Hotels vs. Amot Investments
Performance |
| Timeline |
| Dan Hotels |
| Amot Investments |
Dan Hotels and Amot Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dan Hotels and Amot Investments
The main advantage of trading using opposite Dan Hotels and Amot Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dan Hotels position performs unexpectedly, Amot Investments 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 Amot Investments will offset losses from the drop in Amot Investments' long position.| Dan Hotels vs. Harel Insurance Investments | Dan Hotels vs. Victory Supermarket Chain | Dan Hotels vs. Automatic Bank Services | Dan Hotels vs. First International Bank |
| Amot Investments vs. Israel Canada | Amot Investments vs. Azrieli Group | Amot Investments vs. Delek Group | Amot Investments vs. Shikun Binui |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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