Correlation Between Azrieli and Compugen
Can any of the company-specific risk be diversified away by investing in both Azrieli and Compugen 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 Compugen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azrieli Group and Compugen, you can compare the effects of market volatilities on Azrieli and Compugen 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 Compugen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azrieli and Compugen.
Diversification Opportunities for Azrieli and Compugen
Excellent diversification
The 3 months correlation between Azrieli and Compugen is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Azrieli Group and Compugen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugen 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 Compugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugen has no effect on the direction of Azrieli i.e., Azrieli and Compugen go up and down completely randomly.
Pair Corralation between Azrieli and Compugen
Assuming the 90 days trading horizon Azrieli Group is expected to generate 0.56 times more return on investment than Compugen. However, Azrieli Group is 1.79 times less risky than Compugen. It trades about 0.3 of its potential returns per unit of risk. Compugen is currently generating about -0.38 per unit of risk. If you would invest 2,684,000 in Azrieli Group on August 29, 2024 and sell it today you would earn a total of 256,000 from holding Azrieli Group or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Azrieli Group vs. Compugen
Performance |
| Timeline |
| Azrieli Group |
| Compugen |
Azrieli and Compugen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azrieli and Compugen
The main advantage of trading using opposite Azrieli and Compugen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azrieli position performs unexpectedly, Compugen 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 Compugen will offset losses from the drop in Compugen's long position.| Azrieli vs. Melisron | Azrieli vs. Bank Leumi Le Israel | Azrieli vs. Bank Hapoalim | Azrieli vs. Amot Investments |
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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