Correlation Between Equital and Airport City
Can any of the company-specific risk be diversified away by investing in both Equital and Airport City 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 Equital and Airport City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equital and Airport City, you can compare the effects of market volatilities on Equital and Airport City 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 Equital with a short position of Airport City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equital and Airport City.
Diversification Opportunities for Equital and Airport City
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Equital and Airport is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Equital and Airport City in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airport City and Equital 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 Equital are associated (or correlated) with Airport City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airport City has no effect on the direction of Equital i.e., Equital and Airport City go up and down completely randomly.
Pair Corralation between Equital and Airport City
Assuming the 90 days trading horizon Equital is expected to generate 1.11 times more return on investment than Airport City. However, Equital is 1.11 times more volatile than Airport City. It trades about 0.48 of its potential returns per unit of risk. Airport City is currently generating about 0.34 per unit of risk. If you would invest 1,303,000 in Equital on August 29, 2024 and sell it today you would earn a total of 184,000 from holding Equital or generate 14.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equital vs. Airport City
Performance |
| Timeline |
| Equital |
| Airport City |
Equital and Airport City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equital and Airport City
The main advantage of trading using opposite Equital and Airport City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equital position performs unexpectedly, Airport City 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 Airport City will offset losses from the drop in Airport City's long position.| Equital vs. Airport City | Equital vs. Naphtha | Equital vs. Menora Miv Hld | Equital vs. Delek Automotive Systems |
| Airport City vs. Melisron | Airport City vs. Alony Hetz Properties | Airport City vs. Amot Investments | Airport City vs. Azrieli Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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