Correlation Between Victory Supermarket and Azrieli
Can any of the company-specific risk be diversified away by investing in both Victory Supermarket 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 Victory Supermarket and Azrieli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Supermarket Chain and Azrieli Group, you can compare the effects of market volatilities on Victory Supermarket 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 Victory Supermarket with a short position of Azrieli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Supermarket and Azrieli.
Diversification Opportunities for Victory Supermarket and Azrieli
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Victory and Azrieli is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Victory Supermarket Chain and Azrieli Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azrieli Group and Victory Supermarket 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 Victory Supermarket Chain 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 Victory Supermarket i.e., Victory Supermarket and Azrieli go up and down completely randomly.
Pair Corralation between Victory Supermarket and Azrieli
Assuming the 90 days trading horizon Victory Supermarket Chain is expected to generate 0.99 times more return on investment than Azrieli. However, Victory Supermarket Chain is 1.01 times less risky than Azrieli. It trades about 0.1 of its potential returns per unit of risk. Azrieli Group is currently generating about -0.16 per unit of risk. If you would invest 472,469 in Victory Supermarket Chain on January 26, 2024 and sell it today you would earn a total of 13,731 from holding Victory Supermarket Chain or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory Supermarket Chain vs. Azrieli Group
Performance |
| Timeline |
| Victory Supermarket Chain |
| Azrieli Group |
Victory Supermarket and Azrieli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Supermarket and Azrieli
The main advantage of trading using opposite Victory Supermarket and Azrieli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Supermarket 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.| Victory Supermarket vs. Bezeq Israeli Telecommunication | Victory Supermarket vs. Bank Hapoalim | Victory Supermarket vs. Bank Leumi Le Israel | Victory Supermarket vs. Israel Discount Bank |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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