Correlation Between OPC Energy and Alony Hetz

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

By analyzing existing cross correlation between OPC Energy and Alony Hetz Properties, you can compare the effects of market volatilities on OPC Energy and Alony Hetz 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 OPC Energy with a short position of Alony Hetz. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPC Energy and Alony Hetz.

Diversification Opportunities for OPC Energy and Alony Hetz

0.19

Correlation Coefficient

OPC Energy  Alony Hetz

Average diversification

The 3 months correlation between OPC and Alony is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding OPC Energy and Alony Hetz Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alony Hetz Properties and OPC Energy 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 OPC Energy are associated (or correlated) with Alony Hetz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alony Hetz Properties has no effect on the direction of OPC Energy i.e., OPC Energy and Alony Hetz go up and down completely randomly.

Pair Corralation between OPC Energy and Alony Hetz

Assuming the 90 days trading horizon OPC Energy is expected to generate 0.92 times more return on investment than Alony Hetz. However, OPC Energy is 1.09 times less risky than Alony Hetz. It trades about 0.12 of its potential returns per unit of risk. Alony Hetz Properties is currently generating about 0.02 per unit of risk. If you would invest  293,100  in OPC Energy on December 29, 2024 and sell it today you would earn a total of  38,300  from holding OPC Energy or generate 13.07% return on investment over 90 days.

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

OPC Energy  vs.  Alony Hetz Properties

OPC Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OPC Energy are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, OPC Energy sustained solid returns over the last few months and may actually be approaching a breakup point.

Alony Hetz Properties

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alony Hetz Properties are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Alony Hetz is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with OPC Energy and Alony Hetz

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

The idea behind OPC Energy and Alony Hetz Properties 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.