Correlation Between Gazit Globe and Delek Automotive
Can any of the company-specific risk be diversified away by investing in both Gazit Globe and Delek Automotive 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 Gazit Globe and Delek Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gazit Globe and Delek Automotive Systems, you can compare the effects of market volatilities on Gazit Globe and Delek Automotive 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 Gazit Globe with a short position of Delek Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gazit Globe and Delek Automotive.
Diversification Opportunities for Gazit Globe and Delek Automotive
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gazit and Delek is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Gazit Globe and Delek Automotive Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Automotive Systems and Gazit Globe 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 Gazit Globe are associated (or correlated) with Delek Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Automotive Systems has no effect on the direction of Gazit Globe i.e., Gazit Globe and Delek Automotive go up and down completely randomly.
Pair Corralation between Gazit Globe and Delek Automotive
Assuming the 90 days trading horizon Gazit Globe is expected to generate 1.26 times more return on investment than Delek Automotive. However, Gazit Globe is 1.26 times more volatile than Delek Automotive Systems. It trades about 0.25 of its potential returns per unit of risk. Delek Automotive Systems is currently generating about 0.27 per unit of risk. If you would invest 138,900 in Gazit Globe on September 1, 2024 and sell it today you would earn a total of 17,400 from holding Gazit Globe or generate 12.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gazit Globe vs. Delek Automotive Systems
Performance |
| Timeline |
| Gazit Globe |
| Delek Automotive Systems |
Gazit Globe and Delek Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gazit Globe and Delek Automotive
The main advantage of trading using opposite Gazit Globe and Delek Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gazit Globe position performs unexpectedly, Delek Automotive 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 Delek Automotive will offset losses from the drop in Delek Automotive's long position.| Gazit Globe vs. Bezeq Israeli Telecommunication | Gazit Globe vs. Batm Advanced Communications | Gazit Globe vs. Clal Insurance Enterprises | Gazit Globe vs. Israel Discount Bank |
| Delek Automotive vs. El Al Israel | Delek Automotive vs. Magic Software Enterprises | Delek Automotive vs. Neto Malinda | Delek Automotive vs. Orbit Technologies |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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