Correlation Between Fox Wizel and Amot Investments

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

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

Diversification Opportunities for Fox Wizel and Amot Investments

-0.43

Correlation Coefficient

Fox Wizel  Amot Investments

Very good diversification

The 3 months correlation between Fox and Amot is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Fox Wizel and Amot Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amot Investments and Fox Wizel 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 Fox Wizel 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 Fox Wizel i.e., Fox Wizel and Amot Investments go up and down completely randomly.

Pair Corralation between Fox Wizel and Amot Investments

Assuming the 90 days trading horizon Fox Wizel is expected to generate 1.53 times more return on investment than Amot Investments. However, Fox Wizel is 1.53 times more volatile than Amot Investments. It trades about 0.07 of its potential returns per unit of risk. Amot Investments is currently generating about -0.12 per unit of risk. If you would invest  2,886,949  in Fox Wizel on December 28, 2024 and sell it today you would earn a total of  198,051  from holding Fox Wizel or generate 6.86% return on investment over 90 days.

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

Fox Wizel  vs.  Amot Investments

Fox Wizel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fox Wizel are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fox Wizel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Amot Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amot Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Fox Wizel and Amot Investments

The main advantage of trading using opposite Fox Wizel and Amot Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fox Wizel 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 Fox Wizel 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.