Correlation Between Blue Square and Amot Investments

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Can any of the company-specific risk be diversified away by investing in both Blue Square 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 Blue Square and Amot Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Square Real and Amot Investments, you can compare the effects of market volatilities on Blue Square 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 Blue Square with a short position of Amot Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Square and Amot Investments.

Diversification Opportunities for Blue Square and Amot Investments

-0.03
  Correlation Coefficient

Good diversification

The 3 months correlation between Blue and Amot is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Blue Square Real and Amot Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amot Investments and Blue Square 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 Blue Square Real 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 Blue Square i.e., Blue Square and Amot Investments go up and down completely randomly.

Pair Corralation between Blue Square and Amot Investments

Assuming the 90 days trading horizon Blue Square Real is expected to generate 1.47 times more return on investment than Amot Investments. However, Blue Square is 1.47 times more volatile than Amot Investments. It trades about 0.06 of its potential returns per unit of risk. Amot Investments is currently generating about -0.01 per unit of risk. If you would invest  1,997,000  in Blue Square Real on December 30, 2023 and sell it today you would earn a total of  539,000  from holding Blue Square Real or generate 26.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Blue Square Real  vs.  Amot Investments

 Performance 
       Timeline  
Blue Square Real 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Blue Square Real has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Blue Square 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

 
Low
 
High
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 April 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Blue Square and Amot Investments Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Blue Square and Amot Investments

The main advantage of trading using opposite Blue Square and Amot Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Square 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 Blue Square Real 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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