Correlation Between Augwind Energy and Israel Land

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

By analyzing existing cross correlation between Augwind Energy Tech and Israel Land Development, you can compare the effects of market volatilities on Augwind Energy and Israel Land 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 Augwind Energy with a short position of Israel Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Augwind Energy and Israel Land.

Diversification Opportunities for Augwind Energy and Israel Land

0.65

Correlation Coefficient

Augwind Energy  Israel Land

Poor diversification

The 3 months correlation between Augwind and Israel is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Augwind Energy Tech and Israel Land Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Land Development and Augwind Energy 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 Augwind Energy Tech are associated (or correlated) with Israel Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Land Development has no effect on the direction of Augwind Energy i.e., Augwind Energy and Israel Land go up and down completely randomly.

Pair Corralation between Augwind Energy and Israel Land

Assuming the 90 days trading horizon Augwind Energy Tech is expected to generate 3.04 times more return on investment than Israel Land. However, Augwind Energy is 3.04 times more volatile than Israel Land Development. It trades about 0.37 of its potential returns per unit of risk. Israel Land Development is currently generating about 0.16 per unit of risk. If you would invest  19,040  in Augwind Energy Tech on September 3, 2024 and sell it today you would earn a total of  44,570  from holding Augwind Energy Tech or generate 234.09% return on investment over 90 days.

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

Augwind Energy Tech  vs.  Israel Land Development

Augwind Energy Tech

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Augwind Energy Tech are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Augwind Energy sustained solid returns over the last few months and may actually be approaching a breakup point.

Israel Land Development

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Israel Land Development are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Israel Land sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Augwind Energy and Israel Land

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

The idea behind Augwind Energy Tech and Israel Land Development 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.