Correlation Between Big Shopping and Azrieli
Can any of the company-specific risk be diversified away by investing in both Big Shopping and Azrieli 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 Azrieli 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 Azrieli Group, you can compare the effects of market volatilities on Big Shopping and Azrieli 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 Azrieli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Shopping and Azrieli.
Diversification Opportunities for Big Shopping and Azrieli
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Big and Azrieli is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Big Shopping Centers and Azrieli Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azrieli Group 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 Azrieli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azrieli Group has no effect on the direction of Big Shopping i.e., Big Shopping and Azrieli go up and down completely randomly.
Pair Corralation between Big Shopping and Azrieli
Assuming the 90 days trading horizon Big Shopping is expected to generate 1.3 times less return on investment than Azrieli. But when comparing it to its historical volatility, Big Shopping Centers is 1.15 times less risky than Azrieli. It trades about 0.24 of its potential returns per unit of risk. Azrieli Group is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,684,000 in Azrieli Group on August 28, 2024 and sell it today you would earn a total of 215,000 from holding Azrieli Group or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Shopping Centers vs. Azrieli Group
Performance |
| Timeline |
| Big Shopping Centers |
| Azrieli Group |
Big Shopping and Azrieli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Shopping and Azrieli
The main advantage of trading using opposite Big Shopping and Azrieli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Shopping position performs unexpectedly, Azrieli 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 Azrieli will offset losses from the drop in Azrieli's long position.| Big Shopping vs. Azrieli Group | Big Shopping vs. Melisron | Big Shopping vs. Amot Investments | Big Shopping vs. Alony Hetz Properties |
| Azrieli vs. Melisron | Azrieli vs. Bank Leumi Le Israel | Azrieli vs. Bank Hapoalim | Azrieli 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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