Correlation Between Reit 1 and Azrieli
Can any of the company-specific risk be diversified away by investing in both Reit 1 and Azrieli 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 Reit 1 and Azrieli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reit 1 and Azrieli Group, you can compare the effects of market volatilities on Reit 1 and Azrieli 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 Reit 1 with a short position of Azrieli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reit 1 and Azrieli.
Diversification Opportunities for Reit 1 and Azrieli
Almost no diversification
The 3 months correlation between Reit and Azrieli is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Reit 1 and Azrieli Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azrieli Group and Reit 1 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 Reit 1 are associated (or correlated) with Azrieli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azrieli Group has no effect on the direction of Reit 1 i.e., Reit 1 and Azrieli go up and down completely randomly.
Pair Corralation between Reit 1 and Azrieli
Assuming the 90 days trading horizon Reit 1 is expected to generate 1.9 times less return on investment than Azrieli. But when comparing it to its historical volatility, Reit 1 is 1.1 times less risky than Azrieli. It trades about 0.05 of its potential returns per unit of risk. Azrieli Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,106,935 in Azrieli Group on August 29, 2024 and sell it today you would earn a total of 833,065 from holding Azrieli Group or generate 39.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reit 1 vs. Azrieli Group
Performance |
| Timeline |
| Reit 1 |
| Azrieli Group |
Reit 1 and Azrieli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reit 1 and Azrieli
The main advantage of trading using opposite Reit 1 and Azrieli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reit 1 position performs unexpectedly, Azrieli 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 Azrieli will offset losses from the drop in Azrieli's long position.| Reit 1 vs. Sella Real Estate | Reit 1 vs. Alony Hetz Properties | Reit 1 vs. Azrieli Group | Reit 1 vs. Amot Investments |
| Azrieli vs. Melisron | Azrieli vs. Bank Leumi Le Israel | Azrieli vs. Bank Hapoalim | Azrieli 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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