Correlation Between Elspec and Azrieli
Can any of the company-specific risk be diversified away by investing in both Elspec 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 Elspec and Azrieli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elspec and Azrieli Group, you can compare the effects of market volatilities on Elspec 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 Elspec with a short position of Azrieli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elspec and Azrieli.
Diversification Opportunities for Elspec and Azrieli
Weak diversification
The 3 months correlation between Elspec and Azrieli is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Elspec and Azrieli Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azrieli Group and Elspec 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 Elspec 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 Elspec i.e., Elspec and Azrieli go up and down completely randomly.
Pair Corralation between Elspec and Azrieli
Assuming the 90 days trading horizon Elspec is expected to generate 1.86 times more return on investment than Azrieli. However, Elspec is 1.86 times more volatile than Azrieli Group. It trades about -0.08 of its potential returns per unit of risk. Azrieli Group is currently generating about -0.2 per unit of risk. If you would invest 62,600 in Elspec on January 25, 2024 and sell it today you would lose (3,600) from holding Elspec or give up 5.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Elspec vs. Azrieli Group
Performance |
Timeline |
Elspec |
Azrieli Group |
Elspec and Azrieli Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Elspec and Azrieli
The main advantage of trading using opposite Elspec and Azrieli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elspec 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.Elspec vs. Alony Hetz Properties | Elspec vs. Melisron | Elspec vs. Shufersal | Elspec 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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