Correlation Between Hod Assaf and Alony Hetz

Can any of the company-specific risk be diversified away by investing in both Hod Assaf 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 Hod Assaf and Alony Hetz into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hod Assaf Industries and Alony Hetz Properties, you can compare the effects of market volatilities on Hod Assaf 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 Hod Assaf with a short position of Alony Hetz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hod Assaf and Alony Hetz.

Diversification Opportunities for Hod Assaf and Alony Hetz

0.73

Correlation Coefficient

Hod Assaf  Alony Hetz

Poor diversification

The 3 months correlation between Hod and Alony is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hod Assaf Industries 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 Hod Assaf 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 Hod Assaf Industries 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 Hod Assaf i.e., Hod Assaf and Alony Hetz go up and down completely randomly.

Pair Corralation between Hod Assaf and Alony Hetz

Assuming the 90 days trading horizon Hod Assaf Industries is expected to generate 1.1 times more return on investment than Alony Hetz. However, Hod Assaf is 1.1 times more volatile than Alony Hetz Properties. It trades about 0.29 of its potential returns per unit of risk. Alony Hetz Properties is currently generating about 0.1 per unit of risk. If you would invest  355,000  in Hod Assaf Industries on September 25, 2024 and sell it today you would earn a total of  143,000  from holding Hod Assaf Industries or generate 40.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.83%
Values	Daily Returns

Hod Assaf Industries  vs.  Alony Hetz Properties

Hod Assaf Industries

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hod Assaf Industries are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Hod Assaf sustained solid returns over the last few months and may actually be approaching a breakup point.

Alony Hetz Properties

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alony Hetz Properties are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Alony Hetz sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hod Assaf and Alony Hetz

The main advantage of trading using opposite Hod Assaf and Alony Hetz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hod Assaf 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.

The idea behind Hod Assaf Industries and Alony Hetz Properties pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.