Correlation Between Altshuler Shaham and Abra Information

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

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

Diversification Opportunities for Altshuler Shaham and Abra Information

0.72

Correlation Coefficient

Altshuler Shaham  Abra Information

Poor diversification

The 3 months correlation between Altshuler and Abra is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Altshuler Shaham Financial and Abra Information Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abra Information Tec and Altshuler Shaham 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 Altshuler Shaham Financial are associated (or correlated) with Abra Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abra Information Tec has no effect on the direction of Altshuler Shaham i.e., Altshuler Shaham and Abra Information go up and down completely randomly.

Pair Corralation between Altshuler Shaham and Abra Information

Assuming the 90 days trading horizon Altshuler Shaham is expected to generate 26.01 times less return on investment than Abra Information. In addition to that, Altshuler Shaham is 1.57 times more volatile than Abra Information Technologies. It trades about 0.01 of its total potential returns per unit of risk. Abra Information Technologies is currently generating about 0.52 per unit of volatility. If you would invest  27,830  in Abra Information Technologies on October 11, 2024 and sell it today you would earn a total of  4,480  from holding Abra Information Technologies or generate 16.1% return on investment over 90 days.

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

Altshuler Shaham Financial  vs.  Abra Information Technologies

Altshuler Shaham Fin

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Altshuler Shaham Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Altshuler Shaham sustained solid returns over the last few months and may actually be approaching a breakup point.

Abra Information Tec

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Abra Information Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Abra Information sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altshuler Shaham and Abra Information

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

The idea behind Altshuler Shaham Financial and Abra Information Technologies 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.