Correlation Between Altshuler Shaham and Discount Investment

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

Diversification Opportunities for Altshuler Shaham and Discount Investment

0.93

Correlation Coefficient

Altshuler Shaham  Discount Investment

Almost no diversification

The 3 months correlation between Altshuler and Discount is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Altshuler Shaham Financial and Discount Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Discount Investment Corp 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 Discount Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Discount Investment Corp has no effect on the direction of Altshuler Shaham i.e., Altshuler Shaham and Discount Investment go up and down completely randomly.

Pair Corralation between Altshuler Shaham and Discount Investment

Assuming the 90 days trading horizon Altshuler Shaham Financial is expected to generate 0.76 times more return on investment than Discount Investment. However, Altshuler Shaham Financial is 1.31 times less risky than Discount Investment. It trades about 0.02 of its potential returns per unit of risk. Discount Investment Corp is currently generating about -0.01 per unit of risk. If you would invest  58,260  in Altshuler Shaham Financial on October 10, 2024 and sell it today you would earn a total of  7,240  from holding Altshuler Shaham Financial or generate 12.43% return on investment over 90 days.

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

Altshuler Shaham Financial  vs.  Discount Investment Corp

Altshuler Shaham Fin

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Altshuler Shaham Financial are ranked lower than 10 (%) 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.

Discount Investment Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Discount Investment Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Discount Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altshuler Shaham and Discount Investment

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

The idea behind Altshuler Shaham Financial and Discount Investment Corp 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.