Correlation Between Electra and Plaza Centers
Can any of the company-specific risk be diversified away by investing in both Electra and Plaza Centers 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 Electra and Plaza Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electra and Plaza Centers NV, you can compare the effects of market volatilities on Electra and Plaza Centers 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 Electra with a short position of Plaza Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra and Plaza Centers.
Diversification Opportunities for Electra and Plaza Centers
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electra and Plaza is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Electra and Plaza Centers NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Centers NV and Electra 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 Electra are associated (or correlated) with Plaza Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Centers NV has no effect on the direction of Electra i.e., Electra and Plaza Centers go up and down completely randomly.
Pair Corralation between Electra and Plaza Centers
Assuming the 90 days trading horizon Electra is expected to generate 4.15 times less return on investment than Plaza Centers. But when comparing it to its historical volatility, Electra is 16.22 times less risky than Plaza Centers. It trades about 0.42 of its potential returns per unit of risk. Plaza Centers NV is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 20,000 in Plaza Centers NV on September 1, 2024 and sell it today you would earn a total of 220.00 from holding Plaza Centers NV or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra vs. Plaza Centers NV
Performance |
| Timeline |
| Electra |
| Plaza Centers NV |
Electra and Plaza Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra and Plaza Centers
The main advantage of trading using opposite Electra and Plaza Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra position performs unexpectedly, Plaza Centers 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 Plaza Centers will offset losses from the drop in Plaza Centers' long position.| Electra vs. Alony Hetz Properties | Electra vs. Melisron | Electra vs. Shufersal | Electra vs. Israel Discount Bank |
| Plaza Centers vs. Magic Software Enterprises | Plaza Centers vs. Skyline Investments | Plaza Centers vs. Discount Investment Corp | Plaza Centers vs. Iargento Hi Tech |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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