Correlation Between Gazit Globe and Sano Brunos

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Can any of the company-specific risk be diversified away by investing in both Gazit Globe and Sano Brunos 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 Gazit Globe and Sano Brunos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gazit Globe and Sano Brunos Enterprises, you can compare the effects of market volatilities on Gazit Globe and Sano Brunos 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 Gazit Globe with a short position of Sano Brunos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gazit Globe and Sano Brunos.

Diversification Opportunities for Gazit Globe and Sano Brunos

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Gazit and Sano is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Gazit Globe and Sano Brunos Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sano Brunos Enterprises and Gazit Globe 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 Gazit Globe are associated (or correlated) with Sano Brunos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sano Brunos Enterprises has no effect on the direction of Gazit Globe i.e., Gazit Globe and Sano Brunos go up and down completely randomly.

Pair Corralation between Gazit Globe and Sano Brunos

Assuming the 90 days trading horizon Gazit Globe is expected to generate 2.11 times less return on investment than Sano Brunos. But when comparing it to its historical volatility, Gazit Globe is 1.17 times less risky than Sano Brunos. It trades about 0.06 of its potential returns per unit of risk. Sano Brunos Enterprises is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,942,374  in Sano Brunos Enterprises on December 30, 2023 and sell it today you would earn a total of  99,126  from holding Sano Brunos Enterprises or generate 3.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Gazit Globe  vs.  Sano Brunos Enterprises

 Performance 
       Timeline  
Gazit Globe 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Gazit Globe has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Sano Brunos Enterprises 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Sano Brunos Enterprises are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Sano Brunos unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gazit Globe and Sano Brunos Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gazit Globe and Sano Brunos

The main advantage of trading using opposite Gazit Globe and Sano Brunos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gazit Globe position performs unexpectedly, Sano Brunos 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 Sano Brunos will offset losses from the drop in Sano Brunos' long position.
The idea behind Gazit Globe and Sano Brunos Enterprises 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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