Correlation Between Analyst IMS and Hod Assaf

Can any of the company-specific risk be diversified away by investing in both Analyst IMS and Hod Assaf 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 Analyst IMS and Hod Assaf into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Analyst IMS Investment and Hod Assaf Industries, you can compare the effects of market volatilities on Analyst IMS and Hod Assaf 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 Analyst IMS with a short position of Hod Assaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analyst IMS and Hod Assaf.

Diversification Opportunities for Analyst IMS and Hod Assaf

0.92

Correlation Coefficient

Analyst IMS  Hod Assaf

Almost no diversification

The 3 months correlation between Analyst and Hod is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Analyst IMS Investment and Hod Assaf Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hod Assaf Industries and Analyst IMS 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 Analyst IMS Investment are associated (or correlated) with Hod Assaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hod Assaf Industries has no effect on the direction of Analyst IMS i.e., Analyst IMS and Hod Assaf go up and down completely randomly.

Pair Corralation between Analyst IMS and Hod Assaf

Assuming the 90 days trading horizon Analyst IMS Investment is expected to generate 1.35 times more return on investment than Hod Assaf. However, Analyst IMS is 1.35 times more volatile than Hod Assaf Industries. It trades about 0.78 of its potential returns per unit of risk. Hod Assaf Industries is currently generating about 0.07 per unit of risk. If you would invest  503,000  in Analyst IMS Investment on October 12, 2024 and sell it today you would earn a total of  145,400  from holding Analyst IMS Investment or generate 28.91% return on investment over 90 days.

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

Analyst IMS Investment  vs.  Hod Assaf Industries

Analyst IMS Investment

Risk-Adjusted Performance

51 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Analyst IMS Investment are ranked lower than 51 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Analyst IMS sustained solid returns over the last few months and may actually be approaching a breakup point.

Hod Assaf Industries

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hod Assaf Industries are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Hod Assaf sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Analyst IMS and Hod Assaf

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

The idea behind Analyst IMS Investment and Hod Assaf Industries 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.