Correlation Between Azrieli and Issta Lines

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Can any of the company-specific risk be diversified away by investing in both Azrieli and Issta Lines 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 Issta Lines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azrieli Group and Issta Lines, you can compare the effects of market volatilities on Azrieli and Issta Lines 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 Issta Lines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azrieli and Issta Lines.

Diversification Opportunities for Azrieli and Issta Lines

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Azrieli and Issta is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Azrieli Group and Issta Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Issta Lines 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 Issta Lines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Issta Lines has no effect on the direction of Azrieli i.e., Azrieli and Issta Lines go up and down completely randomly.

Pair Corralation between Azrieli and Issta Lines

Assuming the 90 days trading horizon Azrieli Group is expected to generate 0.72 times more return on investment than Issta Lines. However, Azrieli Group is 1.39 times less risky than Issta Lines. It trades about 0.05 of its potential returns per unit of risk. Issta Lines is currently generating about 0.02 per unit of risk. If you would invest  2,109,705  in Azrieli Group on September 14, 2024 and sell it today you would earn a total of  730,295  from holding Azrieli Group or generate 34.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy99.74%
ValuesDaily Returns

Azrieli Group  vs.  Issta Lines

 Performance 
       Timeline  
Azrieli Group 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Azrieli Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Azrieli sustained solid returns over the last few months and may actually be approaching a breakup point.
Issta Lines 

Risk-Adjusted Performance

26 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Issta Lines are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Issta Lines sustained solid returns over the last few months and may actually be approaching a breakup point.

Azrieli and Issta Lines Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Azrieli and Issta Lines

The main advantage of trading using opposite Azrieli and Issta Lines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azrieli position performs unexpectedly, Issta Lines 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 Issta Lines will offset losses from the drop in Issta Lines' long position.
The idea behind Azrieli Group and Issta Lines pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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