Correlation Between More Provident and Altshuler Shaham

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

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

Diversification Opportunities for More Provident and Altshuler Shaham

-0.58

Correlation Coefficient

More Provident  Altshuler Shaham

Excellent diversification

The 3 months correlation between More and Altshuler is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding More Provident Funds 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 More Provident 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 More Provident Funds 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 More Provident i.e., More Provident and Altshuler Shaham go up and down completely randomly.

Pair Corralation between More Provident and Altshuler Shaham

Assuming the 90 days trading horizon More Provident Funds is expected to generate 0.88 times more return on investment than Altshuler Shaham. However, More Provident Funds is 1.14 times less risky than Altshuler Shaham. It trades about 0.07 of its potential returns per unit of risk. Altshuler Shaham Financial is currently generating about -0.07 per unit of risk. If you would invest  69,701  in More Provident Funds on December 30, 2024 and sell it today you would earn a total of  4,467  from holding More Provident Funds or generate 6.41% return on investment over 90 days.

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

More Provident Funds  vs.  Altshuler Shaham Financial

More Provident Funds

Risk-Adjusted Performance

Modest

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

Altshuler Shaham Fin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Altshuler Shaham Financial 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 More Provident and Altshuler Shaham

The main advantage of trading using opposite More Provident and Altshuler Shaham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if More Provident 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 More Provident Funds 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.