Correlation Between Al Bad and Kerur Holdings

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

By analyzing existing cross correlation between Al Bad Massuot Yitzhak and Kerur Holdings, you can compare the effects of market volatilities on Al Bad and Kerur Holdings 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 Al Bad with a short position of Kerur Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Bad and Kerur Holdings.

Diversification Opportunities for Al Bad and Kerur Holdings

0.68

Correlation Coefficient

Al Bad  Kerur Holdings

Poor diversification

The 3 months correlation between ALBA and Kerur is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Al Bad Massuot Yitzhak and Kerur Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerur Holdings and Al Bad 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 Al Bad Massuot Yitzhak are associated (or correlated) with Kerur Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerur Holdings has no effect on the direction of Al Bad i.e., Al Bad and Kerur Holdings go up and down completely randomly.

Pair Corralation between Al Bad and Kerur Holdings

Assuming the 90 days trading horizon Al Bad Massuot Yitzhak is expected to under-perform the Kerur Holdings. In addition to that, Al Bad is 1.51 times more volatile than Kerur Holdings. It trades about -0.12 of its total potential returns per unit of risk. Kerur Holdings is currently generating about -0.07 per unit of volatility. If you would invest  747,700  in Kerur Holdings on December 29, 2024 and sell it today you would lose (51,200) from holding Kerur Holdings or give up 6.85% of portfolio value over 90 days.

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

Al Bad Massuot Yitzhak  vs.  Kerur Holdings

Al Bad Massuot

Risk-Adjusted Performance

Very Weak

Over the last 90 days Al Bad Massuot Yitzhak 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 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Kerur Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kerur Holdings 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 Al Bad and Kerur Holdings

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

The idea behind Al Bad Massuot Yitzhak and Kerur Holdings 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.