Correlation Between Electra Real and Gazit Globe
Can any of the company-specific risk be diversified away by investing in both Electra Real and Gazit Globe 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 Electra Real and Gazit Globe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electra Real Estate and Gazit Globe, you can compare the effects of market volatilities on Electra Real and Gazit Globe 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 Electra Real with a short position of Gazit Globe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Real and Gazit Globe.
Diversification Opportunities for Electra Real and Gazit Globe
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Electra and Gazit is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Electra Real Estate and Gazit Globe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gazit Globe and Electra Real 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 Electra Real Estate are associated (or correlated) with Gazit Globe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gazit Globe has no effect on the direction of Electra Real i.e., Electra Real and Gazit Globe go up and down completely randomly.
Pair Corralation between Electra Real and Gazit Globe
Assuming the 90 days trading horizon Electra Real Estate is expected to generate 1.02 times more return on investment than Gazit Globe. However, Electra Real is 1.02 times more volatile than Gazit Globe. It trades about 0.0 of its potential returns per unit of risk. Gazit Globe is currently generating about -0.01 per unit of risk. If you would invest 375,657 in Electra Real Estate on January 25, 2024 and sell it today you would lose (26,257) from holding Electra Real Estate or give up 6.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra Real Estate vs. Gazit Globe
Performance |
| Timeline |
| Electra Real Estate |
| Gazit Globe |
Electra Real and Gazit Globe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra Real and Gazit Globe
The main advantage of trading using opposite Electra Real and Gazit Globe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Real position performs unexpectedly, Gazit Globe 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 Gazit Globe will offset losses from the drop in Gazit Globe's long position.The idea behind Electra Real Estate and Gazit Globe 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |