Correlation Between Hod Assaf and Payton L

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

By analyzing existing cross correlation between Hod Assaf Industries and Payton L, you can compare the effects of market volatilities on Hod Assaf and Payton L 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 Hod Assaf with a short position of Payton L. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hod Assaf and Payton L.

Diversification Opportunities for Hod Assaf and Payton L

0.09

Correlation Coefficient

Hod Assaf  Payton L

Significant diversification

The 3 months correlation between Hod and Payton is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hod Assaf Industries and Payton L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payton L and Hod Assaf 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 Hod Assaf Industries are associated (or correlated) with Payton L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payton L has no effect on the direction of Hod Assaf i.e., Hod Assaf and Payton L go up and down completely randomly.

Pair Corralation between Hod Assaf and Payton L

Assuming the 90 days trading horizon Hod Assaf Industries is expected to under-perform the Payton L. In addition to that, Hod Assaf is 1.29 times more volatile than Payton L. It trades about -0.08 of its total potential returns per unit of risk. Payton L is currently generating about 0.0 per unit of volatility. If you would invest  696,800  in Payton L on December 29, 2024 and sell it today you would lose (6,700) from holding Payton L or give up 0.96% of portfolio value over 90 days.

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

Hod Assaf Industries  vs.  Payton L

Hod Assaf Industries

Risk-Adjusted Performance

Very Weak

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

Payton L

Risk-Adjusted Performance

Very Weak

Over the last 90 days Payton L has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Payton L is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hod Assaf and Payton L

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

The idea behind Hod Assaf Industries and Payton L 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.