Correlation Between Strauss and Amot Investments

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

By analyzing existing cross correlation between Strauss Group and Amot Investments, you can compare the effects of market volatilities on Strauss 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 Strauss with a short position of Amot Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strauss and Amot Investments.

Diversification Opportunities for Strauss and Amot Investments

0.58

Correlation Coefficient

Strauss  Amot Investments

Very weak diversification

The 3 months correlation between Strauss and Amot is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Strauss Group and Amot Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amot Investments and Strauss 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 Strauss Group 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 Strauss i.e., Strauss and Amot Investments go up and down completely randomly.

Pair Corralation between Strauss and Amot Investments

Assuming the 90 days trading horizon Strauss Group is expected to generate 0.84 times more return on investment than Amot Investments. However, Strauss Group is 1.2 times less risky than Amot Investments. It trades about 0.13 of its potential returns per unit of risk. Amot Investments is currently generating about -0.13 per unit of risk. If you would invest  665,600  in Strauss Group on February 3, 2024 and sell it today you would earn a total of  24,400  from holding Strauss Group or generate 3.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Strauss Group  vs.  Amot Investments

Strauss Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strauss Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Strauss is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amot Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amot Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Strauss and Amot Investments

The main advantage of trading using opposite Strauss and Amot Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strauss 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.

The idea behind Strauss Group and Amot Investments 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..