Correlation Between Amanet Management and Alony Hetz

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

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

Diversification Opportunities for Amanet Management and Alony Hetz

0.35

Correlation Coefficient

Amanet Management  Alony Hetz

Weak diversification

The 3 months correlation between Amanet and Alony is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Amanet Management Systems 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 Amanet Management 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 Amanet Management Systems 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 Amanet Management i.e., Amanet Management and Alony Hetz go up and down completely randomly.

Pair Corralation between Amanet Management and Alony Hetz

Assuming the 90 days trading horizon Amanet Management Systems is expected to under-perform the Alony Hetz. But the stock apears to be less risky and, when comparing its historical volatility, Amanet Management Systems is 1.64 times less risky than Alony Hetz. The stock trades about -0.01 of its potential returns per unit of risk. The Alony Hetz Properties is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  227,482  in Alony Hetz Properties on February 4, 2024 and sell it today you would earn a total of  27,518  from holding Alony Hetz Properties or generate 12.1% return on investment over 90 days.

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

Amanet Management Systems  vs.  Alony Hetz Properties

Amanet Management Systems

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amanet Management Systems are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amanet Management may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Alony Hetz Properties

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Amanet Management and Alony Hetz

The main advantage of trading using opposite Amanet Management and Alony Hetz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amanet Management 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 Amanet Management Systems 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.