Correlation Between Altshuler Shaham and Human Xtensions

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

Diversification Opportunities for Altshuler Shaham and Human Xtensions

0.05

Correlation Coefficient

Altshuler Shaham  Human Xtensions

Significant diversification

The 3 months correlation between Altshuler and Human is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Altshuler Shaham Financial and Human Xtensions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Human Xtensions 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 Human Xtensions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Human Xtensions has no effect on the direction of Altshuler Shaham i.e., Altshuler Shaham and Human Xtensions go up and down completely randomly.

Pair Corralation between Altshuler Shaham and Human Xtensions

Assuming the 90 days trading horizon Altshuler Shaham Financial is expected to under-perform the Human Xtensions. But the stock apears to be less risky and, when comparing its historical volatility, Altshuler Shaham Financial is 3.08 times less risky than Human Xtensions. The stock trades about -0.08 of its potential returns per unit of risk. The Human Xtensions is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,890  in Human Xtensions on December 25, 2024 and sell it today you would earn a total of  140.00  from holding Human Xtensions or generate 4.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.04%
Values	Daily Returns

Altshuler Shaham Financial  vs.  Human Xtensions

Altshuler Shaham Fin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Altshuler Shaham Financial 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.

Human Xtensions

Risk-Adjusted Performance

Insignificant

Over the last 90 days Human Xtensions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Human Xtensions sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altshuler Shaham and Human Xtensions

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

The idea behind Altshuler Shaham Financial and Human Xtensions 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.