Correlation Between Gold Bond and Amot Investments

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

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

Diversification Opportunities for Gold Bond and Amot Investments

-0.2

Correlation Coefficient

Gold Bond  Amot Investments

Good diversification

The 3 months correlation between Gold and Amot is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding The Gold Bond and Amot Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amot Investments and Gold Bond 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 The Gold Bond 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 Gold Bond i.e., Gold Bond and Amot Investments go up and down completely randomly.

Pair Corralation between Gold Bond and Amot Investments

Assuming the 90 days trading horizon The Gold Bond is expected to generate 1.4 times more return on investment than Amot Investments. However, Gold Bond is 1.4 times more volatile than Amot Investments. It trades about 0.06 of its potential returns per unit of risk. Amot Investments is currently generating about -0.12 per unit of risk. If you would invest  1,680,577  in The Gold Bond on December 29, 2024 and sell it today you would earn a total of  89,423  from holding The Gold Bond or generate 5.32% return on investment over 90 days.

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

The Gold Bond  vs.  Amot Investments

Gold Bond

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Gold Bond are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gold Bond 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 Gold Bond and Amot Investments

The main advantage of trading using opposite Gold Bond and Amot Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bond 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 The Gold Bond 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..