Correlation Between Nasdaq and Altshuler Shaham

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

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

Diversification Opportunities for Nasdaq and Altshuler Shaham

0.59

Correlation Coefficient

Nasdaq  Altshuler Shaham

Very weak diversification

The 3 months correlation between Nasdaq and Altshuler is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc 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 Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and Altshuler Shaham go up and down completely randomly.

Pair Corralation between Nasdaq and Altshuler Shaham

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.66 times more return on investment than Altshuler Shaham. However, Nasdaq Inc is 1.51 times less risky than Altshuler Shaham. It trades about -0.03 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  7,714  in Nasdaq Inc on December 30, 2024 and sell it today you would lose (223.00) from holding Nasdaq Inc or give up 2.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	83.87%
Values	Daily Returns

Nasdaq Inc  vs.  Altshuler Shaham Financial

Nasdaq Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

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 Nasdaq and Altshuler Shaham

The main advantage of trading using opposite Nasdaq and Altshuler Shaham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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 Nasdaq Inc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.