Correlation Between Azrieli and Mega Or
Can any of the company-specific risk be diversified away by investing in both Azrieli and Mega Or 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 Mega Or into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azrieli Group and Mega Or, you can compare the effects of market volatilities on Azrieli and Mega Or 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 Mega Or. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azrieli and Mega Or.
Diversification Opportunities for Azrieli and Mega Or
Almost no diversification
The 3 months correlation between Azrieli and Mega is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Azrieli Group and Mega Or in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega Or 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 Mega Or. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega Or has no effect on the direction of Azrieli i.e., Azrieli and Mega Or go up and down completely randomly.
Pair Corralation between Azrieli and Mega Or
Assuming the 90 days trading horizon Azrieli is expected to generate 3.04 times less return on investment than Mega Or. But when comparing it to its historical volatility, Azrieli Group is 1.68 times less risky than Mega Or. It trades about 0.13 of its potential returns per unit of risk. Mega Or is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,133,000 in Mega Or on October 26, 2024 and sell it today you would earn a total of 91,000 from holding Mega Or or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.44% |
| Values | Daily Returns |
Azrieli Group vs. Mega Or
Performance |
| Timeline |
| Azrieli Group |
| Mega Or |
Azrieli and Mega Or Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azrieli and Mega Or
The main advantage of trading using opposite Azrieli and Mega Or positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azrieli position performs unexpectedly, Mega Or 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 Mega Or will offset losses from the drop in Mega Or's long position.| Azrieli vs. Melisron | Azrieli vs. Bank Leumi Le Israel | Azrieli vs. Bank Hapoalim | Azrieli vs. Amot Investments |
| Mega Or vs. Big Shopping Centers | Mega Or vs. Amot Investments | Mega Or vs. Ashtrom Group | Mega Or vs. Melisron |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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