Correlation Between Gold Bond and Reit 1
Can any of the company-specific risk be diversified away by investing in both Gold Bond and Reit 1 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 Gold Bond and Reit 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gold Bond and Reit 1, you can compare the effects of market volatilities on Gold Bond and Reit 1 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 Gold Bond with a short position of Reit 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bond and Reit 1.
Diversification Opportunities for Gold Bond and Reit 1
Significant diversification
The 3 months correlation between Gold and Reit is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding The Gold Bond and Reit 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reit 1 and Gold Bond 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 The Gold Bond are associated (or correlated) with Reit 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reit 1 has no effect on the direction of Gold Bond i.e., Gold Bond and Reit 1 go up and down completely randomly.
Pair Corralation between Gold Bond and Reit 1
Assuming the 90 days trading horizon Gold Bond is expected to generate 1.51 times less return on investment than Reit 1. But when comparing it to its historical volatility, The Gold Bond is 1.12 times less risky than Reit 1. It trades about 0.02 of its potential returns per unit of risk. Reit 1 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 161,788 in Reit 1 on August 29, 2024 and sell it today you would earn a total of 21,912 from holding Reit 1 or generate 13.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gold Bond vs. Reit 1
Performance |
| Timeline |
| Gold Bond |
| Reit 1 |
Gold Bond and Reit 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Bond and Reit 1
The main advantage of trading using opposite Gold Bond and Reit 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bond position performs unexpectedly, Reit 1 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 Reit 1 will offset losses from the drop in Reit 1's long position.| Gold Bond vs. Big Shopping Centers | Gold Bond vs. Al Bad Massuot Yitzhak | Gold Bond vs. Harel Insurance Investments | Gold Bond vs. Palram |
| Reit 1 vs. Sella Real Estate | Reit 1 vs. Alony Hetz Properties | Reit 1 vs. Azrieli Group | Reit 1 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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