Correlation Between Delek and Alrov Properties
Can any of the company-specific risk be diversified away by investing in both Delek and Alrov Properties 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 Delek and Alrov Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Group and Alrov Properties Lodgings, you can compare the effects of market volatilities on Delek and Alrov Properties 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 Delek with a short position of Alrov Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek and Alrov Properties.
Diversification Opportunities for Delek and Alrov Properties
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Delek and Alrov is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Alrov Properties Lodgings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alrov Properties Lodgings and Delek 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 Delek Group are associated (or correlated) with Alrov Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alrov Properties Lodgings has no effect on the direction of Delek i.e., Delek and Alrov Properties go up and down completely randomly.
Pair Corralation between Delek and Alrov Properties
Assuming the 90 days trading horizon Delek is expected to generate 1.35 times less return on investment than Alrov Properties. In addition to that, Delek is 1.15 times more volatile than Alrov Properties Lodgings. It trades about 0.36 of its total potential returns per unit of risk. Alrov Properties Lodgings is currently generating about 0.56 per unit of volatility. If you would invest 1,350,000 in Alrov Properties Lodgings on August 29, 2024 and sell it today you would earn a total of 215,000 from holding Alrov Properties Lodgings or generate 15.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delek Group vs. Alrov Properties Lodgings
Performance |
| Timeline |
| Delek Group |
| Alrov Properties Lodgings |
Delek and Alrov Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek and Alrov Properties
The main advantage of trading using opposite Delek and Alrov Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek position performs unexpectedly, Alrov Properties 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 Alrov Properties will offset losses from the drop in Alrov Properties' long position.| Delek vs. Hiron Trade Investments Industrial | Delek vs. Isras Investment | Delek vs. Arad Investment Industrial | Delek vs. Big Shopping Centers |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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