Correlation Between Inter Industries and Azrieli
Can any of the company-specific risk be diversified away by investing in both Inter Industries 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 Inter Industries and Azrieli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inter Industries and Azrieli Group, you can compare the effects of market volatilities on Inter Industries 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 Inter Industries with a short position of Azrieli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Industries and Azrieli.
Diversification Opportunities for Inter Industries and Azrieli
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inter and Azrieli is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Inter Industries and Azrieli Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azrieli Group and Inter Industries 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 Inter Industries 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 Inter Industries i.e., Inter Industries and Azrieli go up and down completely randomly.
Pair Corralation between Inter Industries and Azrieli
Assuming the 90 days trading horizon Inter Industries is expected to generate 1.82 times more return on investment than Azrieli. However, Inter Industries is 1.82 times more volatile than Azrieli Group. It trades about 0.17 of its potential returns per unit of risk. Azrieli Group is currently generating about -0.21 per unit of risk. If you would invest 26,400 in Inter Industries on January 20, 2024 and sell it today you would earn a total of 2,610 from holding Inter Industries or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inter Industries vs. Azrieli Group
Performance |
| Timeline |
| Inter Industries |
| Azrieli Group |
Inter Industries and Azrieli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inter Industries and Azrieli
The main advantage of trading using opposite Inter Industries and Azrieli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Industries 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.| Inter Industries vs. Automatic Bank Services | Inter Industries vs. EN Shoham Business | Inter Industries vs. Rapac Communication Infrastructure | Inter Industries vs. Tadiran Hldg |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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