Correlation Between Alony Hetz and Castro

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

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

Diversification Opportunities for Alony Hetz and Castro

-0.01

Correlation Coefficient

Alony Hetz  Castro

Good diversification

The 3 months correlation between Alony and Castro is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Alony Hetz Properties and Castro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castro and Alony Hetz 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 Alony Hetz Properties are associated (or correlated) with Castro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castro has no effect on the direction of Alony Hetz i.e., Alony Hetz and Castro go up and down completely randomly.

Pair Corralation between Alony Hetz and Castro

Assuming the 90 days trading horizon Alony Hetz is expected to generate 21.97 times less return on investment than Castro. But when comparing it to its historical volatility, Alony Hetz Properties is 1.2 times less risky than Castro. It trades about 0.02 of its potential returns per unit of risk. Castro is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  916,293  in Castro on December 30, 2024 and sell it today you would earn a total of  455,707  from holding Castro or generate 49.73% return on investment over 90 days.

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

Alony Hetz Properties  vs.  Castro

Alony Hetz Properties

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alony Hetz Properties are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Castro

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Castro are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Castro sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alony Hetz and Castro

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

The idea behind Alony Hetz Properties and Castro 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.