Correlation Between Carmit and Azrieli
Can any of the company-specific risk be diversified away by investing in both Carmit and Azrieli 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 Carmit and Azrieli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmit and Azrieli Group, you can compare the effects of market volatilities on Carmit and Azrieli 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 Carmit with a short position of Azrieli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmit and Azrieli.
Diversification Opportunities for Carmit and Azrieli
Very weak diversification
The 3 months correlation between Carmit and Azrieli is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Carmit and Azrieli Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azrieli Group and Carmit 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 Carmit are associated (or correlated) with Azrieli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azrieli Group has no effect on the direction of Carmit i.e., Carmit and Azrieli go up and down completely randomly.
Pair Corralation between Carmit and Azrieli
Assuming the 90 days trading horizon Carmit is expected to generate 0.7 times more return on investment than Azrieli. However, Carmit is 1.43 times less risky than Azrieli. It trades about 0.02 of its potential returns per unit of risk. Azrieli Group is currently generating about -0.16 per unit of risk. If you would invest 105,600 in Carmit on January 26, 2024 and sell it today you would earn a total of 300.00 from holding Carmit or generate 0.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Carmit vs. Azrieli Group
Performance |
Timeline |
Carmit |
Azrieli Group |
Carmit and Azrieli Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Carmit and Azrieli
The main advantage of trading using opposite Carmit and Azrieli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmit position performs unexpectedly, Azrieli 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 Azrieli will offset losses from the drop in Azrieli's long position.Carmit vs. Bezeq Israeli Telecommunication | Carmit vs. Bank Hapoalim | Carmit vs. Bank Leumi Le Israel | Carmit vs. Israel Discount Bank |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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