Correlation Between Aerodrome and Cellcom Israel
Can any of the company-specific risk be diversified away by investing in both Aerodrome and Cellcom Israel 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 Aerodrome and Cellcom Israel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerodrome Group and Cellcom Israel, you can compare the effects of market volatilities on Aerodrome and Cellcom Israel 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 Aerodrome with a short position of Cellcom Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerodrome and Cellcom Israel.
Diversification Opportunities for Aerodrome and Cellcom Israel
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aerodrome and Cellcom is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aerodrome Group and Cellcom Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellcom Israel and Aerodrome 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 Aerodrome Group are associated (or correlated) with Cellcom Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellcom Israel has no effect on the direction of Aerodrome i.e., Aerodrome and Cellcom Israel go up and down completely randomly.
Pair Corralation between Aerodrome and Cellcom Israel
Assuming the 90 days trading horizon Aerodrome Group is expected to generate 3.07 times more return on investment than Cellcom Israel. However, Aerodrome is 3.07 times more volatile than Cellcom Israel. It trades about 0.16 of its potential returns per unit of risk. Cellcom Israel is currently generating about -0.13 per unit of risk. If you would invest 7,600 in Aerodrome Group on January 20, 2024 and sell it today you would earn a total of 1,070 from holding Aerodrome Group or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aerodrome Group vs. Cellcom Israel
Performance |
| Timeline |
| Aerodrome Group |
| Cellcom Israel |
Aerodrome and Cellcom Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerodrome and Cellcom Israel
The main advantage of trading using opposite Aerodrome and Cellcom Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerodrome position performs unexpectedly, Cellcom Israel 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 Cellcom Israel will offset losses from the drop in Cellcom Israel's long position.| Aerodrome vs. EN Shoham Business | Aerodrome vs. Accel Solutions Group | Aerodrome vs. SR Accord | Aerodrome vs. Rapac Communication Infrastructure |
| Cellcom Israel vs. EN Shoham Business | Cellcom Israel vs. Accel Solutions Group | Cellcom Israel vs. SR Accord | Cellcom Israel vs. Rapac Communication Infrastructure |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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