Correlation Between Holmes Place and Alony Hetz
Can any of the company-specific risk be diversified away by investing in both Holmes Place and Alony Hetz 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 Holmes Place and Alony Hetz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holmes Place International and Alony Hetz Properties, you can compare the effects of market volatilities on Holmes Place and Alony Hetz 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 Holmes Place with a short position of Alony Hetz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holmes Place and Alony Hetz.
Diversification Opportunities for Holmes Place and Alony Hetz
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Holmes and Alony is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Holmes Place International and Alony Hetz Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alony Hetz Properties and Holmes Place 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 Holmes Place International are associated (or correlated) with Alony Hetz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alony Hetz Properties has no effect on the direction of Holmes Place i.e., Holmes Place and Alony Hetz go up and down completely randomly.
Pair Corralation between Holmes Place and Alony Hetz
Assuming the 90 days trading horizon Holmes Place International is expected to generate 1.24 times more return on investment than Alony Hetz. However, Holmes Place is 1.24 times more volatile than Alony Hetz Properties. It trades about 0.18 of its potential returns per unit of risk. Alony Hetz Properties is currently generating about 0.11 per unit of risk. If you would invest 52,500 in Holmes Place International on September 4, 2024 and sell it today you would earn a total of 4,500 from holding Holmes Place International or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.44% |
| Values | Daily Returns |
Holmes Place International vs. Alony Hetz Properties
Performance |
| Timeline |
| Holmes Place Interna |
| Alony Hetz Properties |
Holmes Place and Alony Hetz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holmes Place and Alony Hetz
The main advantage of trading using opposite Holmes Place and Alony Hetz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holmes Place position performs unexpectedly, Alony Hetz 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 Alony Hetz will offset losses from the drop in Alony Hetz's long position.| Holmes Place vs. Clal Insurance Enterprises | Holmes Place vs. Israel Discount Bank | Holmes Place vs. Bezeq Israeli Telecommunication | Holmes Place vs. Alony Hetz Properties |
| Alony Hetz vs. Amot Investments | Alony Hetz vs. Azrieli Group | Alony Hetz vs. Melisron | Alony Hetz vs. Israel Discount Bank |
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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