Correlation Between Azrieli and Bonei Hatichon
Can any of the company-specific risk be diversified away by investing in both Azrieli and Bonei Hatichon 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 Azrieli and Bonei Hatichon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azrieli Group and Bonei Hatichon Civil, you can compare the effects of market volatilities on Azrieli and Bonei Hatichon 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 Azrieli with a short position of Bonei Hatichon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azrieli and Bonei Hatichon.
Diversification Opportunities for Azrieli and Bonei Hatichon
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Azrieli and Bonei is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Azrieli Group and Bonei Hatichon Civil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonei Hatichon Civil and Azrieli 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 Azrieli Group are associated (or correlated) with Bonei Hatichon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonei Hatichon Civil has no effect on the direction of Azrieli i.e., Azrieli and Bonei Hatichon go up and down completely randomly.
Pair Corralation between Azrieli and Bonei Hatichon
Assuming the 90 days trading horizon Azrieli is expected to generate 1.38 times less return on investment than Bonei Hatichon. But when comparing it to its historical volatility, Azrieli Group is 1.38 times less risky than Bonei Hatichon. It trades about 0.04 of its potential returns per unit of risk. Bonei Hatichon Civil is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 301,468 in Bonei Hatichon Civil on August 30, 2024 and sell it today you would earn a total of 119,332 from holding Bonei Hatichon Civil or generate 39.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Azrieli Group vs. Bonei Hatichon Civil
Performance |
| Timeline |
| Azrieli Group |
| Bonei Hatichon Civil |
Azrieli and Bonei Hatichon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azrieli and Bonei Hatichon
The main advantage of trading using opposite Azrieli and Bonei Hatichon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azrieli position performs unexpectedly, Bonei Hatichon 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 Bonei Hatichon will offset losses from the drop in Bonei Hatichon's long position.| Azrieli vs. Melisron | Azrieli vs. Bank Leumi Le Israel | Azrieli vs. Bank Hapoalim | Azrieli vs. Amot Investments |
| Bonei Hatichon vs. ICL Israel Chemicals | Bonei Hatichon vs. Amanet Management Systems | Bonei Hatichon vs. Rimon Consulting Management | Bonei Hatichon vs. Netz Hotels |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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