Correlation Between ORT and Gazit Globe
Can any of the company-specific risk be diversified away by investing in both ORT 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 ORT and Gazit Globe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORT and Gazit Globe, you can compare the effects of market volatilities on ORT 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 ORT with a short position of Gazit Globe. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORT and Gazit Globe.
Diversification Opportunities for ORT and Gazit Globe
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ORT and Gazit is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ORT and Gazit Globe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gazit Globe and ORT 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 ORT 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 ORT i.e., ORT and Gazit Globe go up and down completely randomly.
Pair Corralation between ORT and Gazit Globe
Assuming the 90 days trading horizon ORT is expected to under-perform the Gazit Globe. In addition to that, ORT is 1.08 times more volatile than Gazit Globe. It trades about -0.25 of its total potential returns per unit of risk. Gazit Globe is currently generating about -0.11 per unit of volatility. If you would invest 116,000 in Gazit Globe on January 20, 2024 and sell it today you would lose (5,000) from holding Gazit Globe or give up 4.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ORT vs. Gazit Globe
Performance |
| Timeline |
| ORT |
| Gazit Globe |
ORT and Gazit Globe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORT and Gazit Globe
The main advantage of trading using opposite ORT and Gazit Globe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORT 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.| ORT vs. Automatic Bank Services | ORT vs. EN Shoham Business | ORT vs. Rapac Communication Infrastructure | ORT vs. Tadiran Hldg |
| Gazit Globe vs. Migdal Insurance | Gazit Globe vs. The Phoenix Holdings | Gazit Globe vs. Harel Insurance Investments | Gazit Globe 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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