Correlation Between Ashtrom and Amot Investments

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

By analyzing existing cross correlation between Ashtrom Group and Amot Investments, you can compare the effects of market volatilities on Ashtrom and Amot Investments 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 Ashtrom with a short position of Amot Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtrom and Amot Investments.

Diversification Opportunities for Ashtrom and Amot Investments

0.96

Correlation Coefficient

Ashtrom  Amot Investments

Almost no diversification

The 3 months correlation between Ashtrom and Amot is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ashtrom Group and Amot Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amot Investments and Ashtrom 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 Ashtrom Group are associated (or correlated) with Amot Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amot Investments has no effect on the direction of Ashtrom i.e., Ashtrom and Amot Investments go up and down completely randomly.

Pair Corralation between Ashtrom and Amot Investments

Assuming the 90 days trading horizon Ashtrom Group is expected to generate 1.2 times more return on investment than Amot Investments. However, Ashtrom is 1.2 times more volatile than Amot Investments. It trades about 0.26 of its potential returns per unit of risk. Amot Investments is currently generating about 0.31 per unit of risk. If you would invest  500,100  in Ashtrom Group on September 3, 2024 and sell it today you would earn a total of  136,700  from holding Ashtrom Group or generate 27.33% return on investment over 90 days.

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

Ashtrom Group  vs.  Amot Investments

Ashtrom Group

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ashtrom Group are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ashtrom sustained solid returns over the last few months and may actually be approaching a breakup point.

Amot Investments

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amot Investments are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amot Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ashtrom and Amot Investments

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

The idea behind Ashtrom Group and Amot Investments 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.