Correlation Between Airport City and Baran
Can any of the company-specific risk be diversified away by investing in both Airport City and Baran 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 Airport City and Baran into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airport City and Baran Group, you can compare the effects of market volatilities on Airport City and Baran 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 Airport City with a short position of Baran. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airport City and Baran.
Diversification Opportunities for Airport City and Baran
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Airport and Baran is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Airport City and Baran Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baran Group and Airport City 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 Airport City are associated (or correlated) with Baran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baran Group has no effect on the direction of Airport City i.e., Airport City and Baran go up and down completely randomly.
Pair Corralation between Airport City and Baran
Assuming the 90 days trading horizon Airport City is expected to generate 0.47 times more return on investment than Baran. However, Airport City is 2.13 times less risky than Baran. It trades about 0.25 of its potential returns per unit of risk. Baran Group is currently generating about 0.11 per unit of risk. If you would invest 570,000 in Airport City on September 1, 2024 and sell it today you would earn a total of 34,000 from holding Airport City or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airport City vs. Baran Group
Performance |
| Timeline |
| Airport City |
| Baran Group |
Airport City and Baran Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airport City and Baran
The main advantage of trading using opposite Airport City and Baran positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airport City position performs unexpectedly, Baran 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 Baran will offset losses from the drop in Baran's long position.| Airport City vs. Melisron | Airport City vs. Alony Hetz Properties | Airport City vs. Amot Investments | Airport City vs. Azrieli Group |
| Baran vs. Rapac Communication Infrastructure | Baran vs. Elron Electronic Industries | Baran vs. Lesico | Baran vs. Palram |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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