Correlation Between Altshuler Shaham and Mivtach Shamir

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

Diversification Opportunities for Altshuler Shaham and Mivtach Shamir

0.91

Correlation Coefficient

Altshuler Shaham  Mivtach Shamir

Almost no diversification

The 3 months correlation between Altshuler and Mivtach is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Altshuler Shaham Financial and Mivtach Shamir in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mivtach Shamir 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 Mivtach Shamir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mivtach Shamir has no effect on the direction of Altshuler Shaham i.e., Altshuler Shaham and Mivtach Shamir go up and down completely randomly.

Pair Corralation between Altshuler Shaham and Mivtach Shamir

Assuming the 90 days trading horizon Altshuler Shaham Financial is expected to generate 1.19 times more return on investment than Mivtach Shamir. However, Altshuler Shaham is 1.19 times more volatile than Mivtach Shamir. It trades about 0.23 of its potential returns per unit of risk. Mivtach Shamir is currently generating about 0.15 per unit of risk. If you would invest  50,030  in Altshuler Shaham Financial on September 14, 2024 and sell it today you would earn a total of  12,560  from holding Altshuler Shaham Financial or generate 25.1% 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.  Mivtach Shamir

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.

Mivtach Shamir

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with Altshuler Shaham and Mivtach Shamir

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

The idea behind Altshuler Shaham Financial and Mivtach Shamir 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.

Check out your portfolio center.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.