Correlation Between EN Shoham and Ashot Ashkelon
Can any of the company-specific risk be diversified away by investing in both EN Shoham 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 EN Shoham and Ashot Ashkelon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EN Shoham Business and Ashot Ashkelon Industries, you can compare the effects of market volatilities on EN Shoham 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 EN Shoham with a short position of Ashot Ashkelon. Check out your portfolio center. Please also check ongoing floating volatility patterns of EN Shoham and Ashot Ashkelon.
Diversification Opportunities for EN Shoham and Ashot Ashkelon
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SHOM and Ashot is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding EN Shoham Business 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 EN Shoham 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 EN Shoham Business 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 EN Shoham i.e., EN Shoham and Ashot Ashkelon go up and down completely randomly.
Pair Corralation between EN Shoham and Ashot Ashkelon
Assuming the 90 days trading horizon EN Shoham Business is expected to under-perform the Ashot Ashkelon. But the stock apears to be less risky and, when comparing its historical volatility, EN Shoham Business is 1.42 times less risky than Ashot Ashkelon. The stock trades about -0.17 of its potential returns per unit of risk. The Ashot Ashkelon Industries is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 558,600 in Ashot Ashkelon Industries on January 12, 2025 and sell it today you would lose (30,600) from holding Ashot Ashkelon Industries or give up 5.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EN Shoham Business vs. Ashot Ashkelon Industries
Performance |
| Timeline |
| EN Shoham Business |
| Ashot Ashkelon Industries |
EN Shoham and Ashot Ashkelon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EN Shoham and Ashot Ashkelon
The main advantage of trading using opposite EN Shoham and Ashot Ashkelon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EN Shoham 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.| EN Shoham vs. Mydas Real Estate | EN Shoham vs. Canzon Israel | EN Shoham vs. Teuza A Fairchild | EN Shoham vs. Analyst IMS Investment |
| Ashot Ashkelon vs. Bet Shemesh Engines | Ashot Ashkelon vs. Elbit Systems | Ashot Ashkelon vs. Bezeq Israeli Telecommunication | Ashot Ashkelon vs. Clal Insurance Enterprises |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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