Correlation Between Itay Financial and Altshuler Shaham

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

By analyzing existing cross correlation between Itay Financial AA and Altshuler Shaham Financial, you can compare the effects of market volatilities on Itay Financial and Altshuler Shaham 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 Itay Financial with a short position of Altshuler Shaham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itay Financial and Altshuler Shaham.

Diversification Opportunities for Itay Financial and Altshuler Shaham

0.57

Correlation Coefficient

Itay Financial  Altshuler Shaham

Very weak diversification

The 3 months correlation between Itay and Altshuler is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Itay Financial AA and Altshuler Shaham Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altshuler Shaham Fin and Itay Financial 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 Itay Financial AA are associated (or correlated) with Altshuler Shaham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altshuler Shaham Fin has no effect on the direction of Itay Financial i.e., Itay Financial and Altshuler Shaham go up and down completely randomly.

Pair Corralation between Itay Financial and Altshuler Shaham

Assuming the 90 days trading horizon Itay Financial AA is expected to generate 20.7 times more return on investment than Altshuler Shaham. However, Itay Financial is 20.7 times more volatile than Altshuler Shaham Financial. It trades about 0.04 of its potential returns per unit of risk. Altshuler Shaham Financial is currently generating about 0.02 per unit of risk. If you would invest  10,410  in Itay Financial AA on October 10, 2024 and sell it today you would earn a total of  28,790  from holding Itay Financial AA or generate 276.56% return on investment over 90 days.

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

Itay Financial AA  vs.  Altshuler Shaham Financial

Itay Financial AA

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Itay Financial AA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Itay Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Altshuler Shaham Fin

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Altshuler Shaham Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Altshuler Shaham sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Itay Financial and Altshuler Shaham

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

The idea behind Itay Financial AA and Altshuler Shaham Financial 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.