Correlation Between Big Shopping and Amot Investments
Can any of the company-specific risk be diversified away by investing in both Big Shopping and Amot Investments 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 Big Shopping and Amot Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Shopping Centers and Amot Investments, you can compare the effects of market volatilities on Big Shopping and Amot Investments 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 Big Shopping with a short position of Amot Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Shopping and Amot Investments.
Diversification Opportunities for Big Shopping and Amot Investments
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Big and Amot is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Big Shopping Centers and Amot Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amot Investments and Big Shopping 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 Big Shopping Centers are associated (or correlated) with Amot Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amot Investments has no effect on the direction of Big Shopping i.e., Big Shopping and Amot Investments go up and down completely randomly.
Pair Corralation between Big Shopping and Amot Investments
Assuming the 90 days trading horizon Big Shopping Centers is expected to generate 0.89 times more return on investment than Amot Investments. However, Big Shopping Centers is 1.13 times less risky than Amot Investments. It trades about 0.11 of its potential returns per unit of risk. Amot Investments is currently generating about 0.04 per unit of risk. If you would invest 3,683,000 in Big Shopping Centers on August 29, 2024 and sell it today you would earn a total of 1,150,000 from holding Big Shopping Centers or generate 31.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.36% |
| Values | Daily Returns |
Big Shopping Centers vs. Amot Investments
Performance |
| Timeline |
| Big Shopping Centers |
| Amot Investments |
Big Shopping and Amot Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Shopping and Amot Investments
The main advantage of trading using opposite Big Shopping and Amot Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Shopping position performs unexpectedly, Amot Investments 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 Amot Investments will offset losses from the drop in Amot Investments' long position.| Big Shopping vs. Israel Canada | Big Shopping vs. Azrieli Group | Big Shopping vs. Delek Group | Big Shopping vs. Israel Discount Bank |
| Amot Investments vs. Israel Canada | Amot Investments vs. Azrieli Group | Amot Investments vs. Delek Group | Amot Investments vs. Israel Discount Bank |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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