Correlation Between Altshuler Shaham and Libra Insurance

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

Diversification Opportunities for Altshuler Shaham and Libra Insurance

0.83

Correlation Coefficient

Altshuler Shaham  Libra Insurance

Very poor diversification

The 3 months correlation between Altshuler and Libra is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Altshuler Shaham Financial and Libra Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libra Insurance 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 Libra Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libra Insurance has no effect on the direction of Altshuler Shaham i.e., Altshuler Shaham and Libra Insurance go up and down completely randomly.

Pair Corralation between Altshuler Shaham and Libra Insurance

Assuming the 90 days trading horizon Altshuler Shaham is expected to generate 2.42 times less return on investment than Libra Insurance. But when comparing it to its historical volatility, Altshuler Shaham Financial is 1.33 times less risky than Libra Insurance. It trades about 0.23 of its potential returns per unit of risk. Libra Insurance is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest  57,999  in Libra Insurance on September 14, 2024 and sell it today you would earn a total of  42,401  from holding Libra Insurance or generate 73.11% return on investment over 90 days.

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

Altshuler Shaham Financial  vs.  Libra Insurance

Altshuler Shaham Fin

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Altshuler Shaham Financial are ranked lower than 17 (%) 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.

Libra Insurance

Risk-Adjusted Performance

32 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Libra Insurance are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Libra Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altshuler Shaham and Libra Insurance

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

The idea behind Altshuler Shaham Financial and Libra Insurance 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.