Correlation Between Elbit Imaging and Azrieli
Can any of the company-specific risk be diversified away by investing in both Elbit Imaging 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 Elbit Imaging and Azrieli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Imaging and Azrieli Group, you can compare the effects of market volatilities on Elbit Imaging 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 Elbit Imaging with a short position of Azrieli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Imaging and Azrieli.
Diversification Opportunities for Elbit Imaging and Azrieli
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elbit and Azrieli is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Imaging and Azrieli Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azrieli Group and Elbit Imaging 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 Elbit Imaging 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 Elbit Imaging i.e., Elbit Imaging and Azrieli go up and down completely randomly.
Pair Corralation between Elbit Imaging and Azrieli
Assuming the 90 days trading horizon Elbit Imaging is expected to generate 1.16 times more return on investment than Azrieli. However, Elbit Imaging is 1.16 times more volatile than Azrieli Group. It trades about -0.13 of its potential returns per unit of risk. Azrieli Group is currently generating about -0.21 per unit of risk. If you would invest 37,300 in Elbit Imaging on January 20, 2024 and sell it today you would lose (2,000) from holding Elbit Imaging or give up 5.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elbit Imaging vs. Azrieli Group
Performance |
| Timeline |
| Elbit Imaging |
| Azrieli Group |
Elbit Imaging and Azrieli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Imaging and Azrieli
The main advantage of trading using opposite Elbit Imaging and Azrieli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Imaging 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.The idea behind Elbit Imaging and Azrieli Group 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.| Azrieli vs. Migdal Insurance | Azrieli vs. The Phoenix Holdings | Azrieli vs. Harel Insurance Investments | Azrieli vs. Clal Insurance Enterprises |
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.
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