Correlation Between Kardan Real and Alony Hetz
Can any of the company-specific risk be diversified away by investing in both Kardan Real 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 Kardan Real and Alony Hetz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kardan Real Es and Alony Hetz Properties, you can compare the effects of market volatilities on Kardan Real 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 Kardan Real with a short position of Alony Hetz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kardan Real and Alony Hetz.
Diversification Opportunities for Kardan Real and Alony Hetz
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kardan and Alony is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kardan Real Es 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 Kardan Real 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 Kardan Real Es 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 Kardan Real i.e., Kardan Real and Alony Hetz go up and down completely randomly.
Pair Corralation between Kardan Real and Alony Hetz
Assuming the 90 days trading horizon Kardan Real Es is expected to generate 1.19 times more return on investment than Alony Hetz. However, Kardan Real is 1.19 times more volatile than Alony Hetz Properties. It trades about -0.25 of its potential returns per unit of risk. Alony Hetz Properties is currently generating about -0.36 per unit of risk. If you would invest 47,270 in Kardan Real Es on January 25, 2024 and sell it today you would lose (4,430) from holding Kardan Real Es or give up 9.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kardan Real Es vs. Alony Hetz Properties
Performance |
| Timeline |
| Kardan Real Es |
| Alony Hetz Properties |
Kardan Real and Alony Hetz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kardan Real and Alony Hetz
The main advantage of trading using opposite Kardan Real and Alony Hetz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kardan Real 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 Kardan Real Es 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.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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