Correlation Between Kardan Israel and Gazit Globe
Can any of the company-specific risk be diversified away by investing in both Kardan Israel 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 Kardan Israel and Gazit Globe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kardan Israel and Gazit Globe, you can compare the effects of market volatilities on Kardan Israel 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 Kardan Israel with a short position of Gazit Globe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kardan Israel and Gazit Globe.
Diversification Opportunities for Kardan Israel and Gazit Globe
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kardan and Gazit is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kardan Israel and Gazit Globe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gazit Globe and Kardan Israel 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 Kardan Israel 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 Kardan Israel i.e., Kardan Israel and Gazit Globe go up and down completely randomly.
Pair Corralation between Kardan Israel and Gazit Globe
Assuming the 90 days trading horizon Kardan Israel is expected to generate 0.88 times more return on investment than Gazit Globe. However, Kardan Israel is 1.14 times less risky than Gazit Globe. It trades about 0.06 of its potential returns per unit of risk. Gazit Globe is currently generating about -0.02 per unit of risk. If you would invest 21,620 in Kardan Israel on January 26, 2024 and sell it today you would earn a total of 540.00 from holding Kardan Israel or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kardan Israel vs. Gazit Globe
Performance |
| Timeline |
| Kardan Israel |
| Gazit Globe |
Kardan Israel and Gazit Globe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kardan Israel and Gazit Globe
The main advantage of trading using opposite Kardan Israel and Gazit Globe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kardan Israel 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.| Kardan Israel vs. Azrieli Group | Kardan Israel vs. Melisron | Kardan Israel vs. Amot Investments | Kardan Israel vs. Mivne Real Estate |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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