Correlation Between Aerodrome and B Yair
Can any of the company-specific risk be diversified away by investing in both Aerodrome and B Yair 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 Aerodrome and B Yair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerodrome Group and B Yair Building, you can compare the effects of market volatilities on Aerodrome and B Yair 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 Aerodrome with a short position of B Yair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerodrome and B Yair.
Diversification Opportunities for Aerodrome and B Yair
Significant diversification
The 3 months correlation between Aerodrome and BYAR is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Aerodrome Group and B Yair Building in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Yair Building and Aerodrome 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 Aerodrome Group are associated (or correlated) with B Yair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Yair Building has no effect on the direction of Aerodrome i.e., Aerodrome and B Yair go up and down completely randomly.
Pair Corralation between Aerodrome and B Yair
Assuming the 90 days trading horizon Aerodrome Group is expected to generate 0.75 times more return on investment than B Yair. However, Aerodrome Group is 1.33 times less risky than B Yair. It trades about 0.15 of its potential returns per unit of risk. B Yair Building is currently generating about -0.35 per unit of risk. If you would invest 6,630 in Aerodrome Group on November 3, 2024 and sell it today you would earn a total of 660.00 from holding Aerodrome Group or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aerodrome Group vs. B Yair Building
Performance |
| Timeline |
| Aerodrome Group |
| B Yair Building |
Aerodrome and B Yair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerodrome and B Yair
The main advantage of trading using opposite Aerodrome and B Yair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerodrome position performs unexpectedly, B Yair 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 B Yair will offset losses from the drop in B Yair's long position.| Aerodrome vs. Hiron Trade Investments Industrial | Aerodrome vs. Elron Electronic Industries | Aerodrome vs. Harel Insurance Investments | Aerodrome vs. Amot Investments |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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