Correlation Between Armada Hflr and Altshuler Shaham

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

By analyzing existing cross correlation between Armada Hflr Pr and Altshuler Shaham Financial, you can compare the effects of market volatilities on Armada Hflr and Altshuler Shaham 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 Armada Hflr with a short position of Altshuler Shaham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Altshuler Shaham.

Diversification Opportunities for Armada Hflr and Altshuler Shaham

0.82

Correlation Coefficient

Armada Hflr  Altshuler Shaham

Very poor diversification

The 3 months correlation between Armada and Altshuler is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Altshuler Shaham Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altshuler Shaham Fin and Armada Hflr 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 Armada Hflr Pr are associated (or correlated) with Altshuler Shaham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altshuler Shaham Fin has no effect on the direction of Armada Hflr i.e., Armada Hflr and Altshuler Shaham go up and down completely randomly.

Pair Corralation between Armada Hflr and Altshuler Shaham

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Altshuler Shaham. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.04 times less risky than Altshuler Shaham. The stock trades about -0.21 of its potential returns per unit of risk. The Altshuler Shaham Financial is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  60,520  in Altshuler Shaham Financial on December 29, 2024 and sell it today you would lose (5,360) from holding Altshuler Shaham Financial or give up 8.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	85.25%
Values	Daily Returns

Armada Hflr Pr  vs.  Altshuler Shaham Financial

Armada Hflr Pr

Risk-Adjusted Performance

Very Weak

Over the last 90 days Armada Hflr Pr 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 technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Altshuler Shaham Fin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Altshuler Shaham Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Armada Hflr and Altshuler Shaham

The main advantage of trading using opposite Armada Hflr and Altshuler Shaham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Altshuler Shaham 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 Altshuler Shaham will offset losses from the drop in Altshuler Shaham's long position.

The idea behind Armada Hflr Pr and Altshuler Shaham Financial 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.