Correlation Between Azrieli and Reit 1
Can any of the company-specific risk be diversified away by investing in both Azrieli and Reit 1 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 Reit 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azrieli Group and Reit 1, you can compare the effects of market volatilities on Azrieli and Reit 1 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 Reit 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azrieli and Reit 1.
Diversification Opportunities for Azrieli and Reit 1
Very weak diversification
The 3 months correlation between Azrieli and Reit is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Azrieli Group and Reit 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reit 1 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 Reit 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reit 1 has no effect on the direction of Azrieli i.e., Azrieli and Reit 1 go up and down completely randomly.
Pair Corralation between Azrieli and Reit 1
Assuming the 90 days trading horizon Azrieli Group is expected to generate 0.98 times more return on investment than Reit 1. However, Azrieli Group is 1.02 times less risky than Reit 1. It trades about 0.06 of its potential returns per unit of risk. Reit 1 is currently generating about 0.04 per unit of risk. If you would invest 1,963,071 in Azrieli Group on November 5, 2024 and sell it today you would earn a total of 1,006,929 from holding Azrieli Group or generate 51.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Azrieli Group vs. Reit 1
Performance |
| Timeline |
| Azrieli Group |
| Reit 1 |
Azrieli and Reit 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azrieli and Reit 1
The main advantage of trading using opposite Azrieli and Reit 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azrieli position performs unexpectedly, Reit 1 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 Reit 1 will offset losses from the drop in Reit 1's long position.| Azrieli vs. Melisron | Azrieli vs. Bank Leumi Le Israel | Azrieli vs. Bank Hapoalim | Azrieli vs. Amot Investments |
| Reit 1 vs. Sella Real Estate | Reit 1 vs. Alony Hetz Properties | Reit 1 vs. Azrieli Group | Reit 1 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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