Correlation Between Azrieli and Safe T
Can any of the company-specific risk be diversified away by investing in both Azrieli and Safe T 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 Safe T into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azrieli Group and Safe T Group, you can compare the effects of market volatilities on Azrieli and Safe T 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 Safe T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azrieli and Safe T.
Diversification Opportunities for Azrieli and Safe T
Very good diversification
The 3 months correlation between Azrieli and Safe is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Azrieli Group and Safe T Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe T Group 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 Safe T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe T Group has no effect on the direction of Azrieli i.e., Azrieli and Safe T go up and down completely randomly.
Pair Corralation between Azrieli and Safe T
Assuming the 90 days trading horizon Azrieli is expected to generate 8.15 times less return on investment than Safe T. But when comparing it to its historical volatility, Azrieli Group is 3.68 times less risky than Safe T. It trades about 0.04 of its potential returns per unit of risk. Safe T Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 11,360 in Safe T Group on August 25, 2024 and sell it today you would earn a total of 37,040 from holding Safe T Group or generate 326.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Azrieli Group vs. Safe T Group
Performance |
| Timeline |
| Azrieli Group |
| Safe T Group |
Azrieli and Safe T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azrieli and Safe T
The main advantage of trading using opposite Azrieli and Safe T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azrieli position performs unexpectedly, Safe T 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 Safe T will offset losses from the drop in Safe T's long position.| Azrieli vs. Israel Canada | Azrieli vs. Delek Group | Azrieli vs. Shikun Binui | Azrieli vs. Israel Discount Bank |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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