Correlation Between Global Knafaim and Azorim Investment
Can any of the company-specific risk be diversified away by investing in both Global Knafaim and Azorim Investment 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 Global Knafaim and Azorim Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Knafaim Leasing and Azorim Investment Development, you can compare the effects of market volatilities on Global Knafaim and Azorim Investment 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 Global Knafaim with a short position of Azorim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Knafaim and Azorim Investment.
Diversification Opportunities for Global Knafaim and Azorim Investment
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Azorim is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Global Knafaim Leasing and Azorim Investment Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azorim Investment and Global Knafaim 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 Global Knafaim Leasing are associated (or correlated) with Azorim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azorim Investment has no effect on the direction of Global Knafaim i.e., Global Knafaim and Azorim Investment go up and down completely randomly.
Pair Corralation between Global Knafaim and Azorim Investment
Assuming the 90 days trading horizon Global Knafaim Leasing is expected to under-perform the Azorim Investment. But the stock apears to be less risky and, when comparing its historical volatility, Global Knafaim Leasing is 1.14 times less risky than Azorim Investment. The stock trades about -0.17 of its potential returns per unit of risk. The Azorim Investment Development is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 191,200 in Azorim Investment Development on August 30, 2024 and sell it today you would earn a total of 15,100 from holding Azorim Investment Development or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Global Knafaim Leasing vs. Azorim Investment Development
Performance |
| Timeline |
| Global Knafaim Leasing |
| Azorim Investment |
Global Knafaim and Azorim Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Knafaim and Azorim Investment
The main advantage of trading using opposite Global Knafaim and Azorim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Knafaim position performs unexpectedly, Azorim Investment 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 Azorim Investment will offset losses from the drop in Azorim Investment's long position.| Global Knafaim vs. Ormat Technologies | Global Knafaim vs. Multi Retail Group | Global Knafaim vs. Nova | Global Knafaim vs. B Communications |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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