Correlation Between Ashtrom and Israel Canada

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

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

Diversification Opportunities for Ashtrom and Israel Canada

0.32

Correlation Coefficient

Ashtrom  Israel Canada

Weak diversification

The 3 months correlation between Ashtrom and Israel is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ashtrom Group and Israel Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Canada 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 Israel Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Canada has no effect on the direction of Ashtrom i.e., Ashtrom and Israel Canada go up and down completely randomly.

Pair Corralation between Ashtrom and Israel Canada

Assuming the 90 days trading horizon Ashtrom Group is expected to under-perform the Israel Canada. But the stock apears to be less risky and, when comparing its historical volatility, Ashtrom Group is 1.39 times less risky than Israel Canada. The stock trades about -0.17 of its potential returns per unit of risk. The Israel Canada is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  142,000  in Israel Canada on December 30, 2024 and sell it today you would lose (24,600) from holding Israel Canada or give up 17.32% of portfolio value over 90 days.

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

Ashtrom Group  vs.  Israel Canada

Ashtrom Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ashtrom Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Israel Canada

Risk-Adjusted Performance

Very Weak

Over the last 90 days Israel Canada has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ashtrom and Israel Canada

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

The idea behind Ashtrom Group and Israel Canada 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.