Correlation Between Altshuler Shaham and Itay Financial

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

Diversification Opportunities for Altshuler Shaham and Itay Financial

-0.79

Correlation Coefficient

Altshuler Shaham  Itay Financial

Pay attention - limited upside

The 3 months correlation between Altshuler and Itay is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Altshuler Shaham Financial and Itay Financial AA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itay Financial AA 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 Itay Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itay Financial AA has no effect on the direction of Altshuler Shaham i.e., Altshuler Shaham and Itay Financial go up and down completely randomly.

Pair Corralation between Altshuler Shaham and Itay Financial

Assuming the 90 days trading horizon Altshuler Shaham Financial is expected to under-perform the Itay Financial. But the stock apears to be less risky and, when comparing its historical volatility, Altshuler Shaham Financial is 6.65 times less risky than Itay Financial. The stock trades about -0.03 of its potential returns per unit of risk. The Itay Financial AA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  40,000  in Itay Financial AA on December 23, 2024 and sell it today you would earn a total of  28,760  from holding Itay Financial AA or generate 71.9% return on investment over 90 days.

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

Altshuler Shaham Financial  vs.  Itay Financial AA

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 somewhat strong basic indicators, Altshuler Shaham is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Itay Financial AA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Itay Financial AA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Itay Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altshuler Shaham and Itay Financial

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

The idea behind Altshuler Shaham Financial and Itay Financial AA 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 Global Correlations module to find global opportunities by holding instruments from different markets.