Correlation Between Al Bad and Shufersal

Can any of the company-specific risk be diversified away by investing in both Al Bad and Shufersal 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 Shufersal 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 Shufersal, you can compare the effects of market volatilities on Al Bad and Shufersal 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 Shufersal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Bad and Shufersal.

Diversification Opportunities for Al Bad and Shufersal

-0.25

Correlation Coefficient

Al Bad  Shufersal

Very good diversification

The 3 months correlation between ALBA and Shufersal is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Al Bad Massuot Yitzhak and Shufersal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shufersal 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 Shufersal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shufersal has no effect on the direction of Al Bad i.e., Al Bad and Shufersal go up and down completely randomly.

Pair Corralation between Al Bad and Shufersal

Assuming the 90 days trading horizon Al Bad Massuot Yitzhak is expected to under-perform the Shufersal. In addition to that, Al Bad is 1.8 times more volatile than Shufersal. It trades about -0.12 of its total potential returns per unit of risk. Shufersal is currently generating about -0.06 per unit of volatility. If you would invest  379,800  in Shufersal on December 30, 2024 and sell it today you would lose (19,700) from holding Shufersal or give up 5.19% of portfolio value over 90 days.

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

Al Bad Massuot Yitzhak  vs.  Shufersal

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.

Shufersal

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Al Bad and Shufersal

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

The idea behind Al Bad Massuot Yitzhak and Shufersal 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.