Correlation Between Gazit Globe and Oil Refineries
Can any of the company-specific risk be diversified away by investing in both Gazit Globe and Oil Refineries 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 Oil Refineries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gazit Globe and Oil Refineries, you can compare the effects of market volatilities on Gazit Globe and Oil Refineries 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 Oil Refineries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gazit Globe and Oil Refineries.
Diversification Opportunities for Gazit Globe and Oil Refineries
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gazit and Oil is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gazit Globe and Oil Refineries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Refineries 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 Oil Refineries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Refineries has no effect on the direction of Gazit Globe i.e., Gazit Globe and Oil Refineries go up and down completely randomly.
Pair Corralation between Gazit Globe and Oil Refineries
Assuming the 90 days trading horizon Gazit Globe is expected to generate 1.32 times more return on investment than Oil Refineries. However, Gazit Globe is 1.32 times more volatile than Oil Refineries. It trades about 0.32 of its potential returns per unit of risk. Oil Refineries is currently generating about -0.07 per unit of risk. If you would invest 135,300 in Gazit Globe on September 3, 2024 and sell it today you would earn a total of 21,000 from holding Gazit Globe or generate 15.52% 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. Oil Refineries
Performance |
| Timeline |
| Gazit Globe |
| Oil Refineries |
Gazit Globe and Oil Refineries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gazit Globe and Oil Refineries
The main advantage of trading using opposite Gazit Globe and Oil Refineries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gazit Globe position performs unexpectedly, Oil Refineries 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 Oil Refineries will offset losses from the drop in Oil Refineries' long position.| Gazit Globe vs. Adgar Investments and | Gazit Globe vs. B Communications | Gazit Globe vs. Hiron Trade Investments Industrial | Gazit Globe vs. Rapac Communication Infrastructure |
| Oil Refineries vs. Delek Group | Oil Refineries vs. Bank Leumi Le Israel | Oil Refineries vs. ICL Israel Chemicals | Oil Refineries vs. Bank Hapoalim |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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