Correlation Between Shufersal and Azrieli
Can any of the company-specific risk be diversified away by investing in both Shufersal 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 Shufersal and Azrieli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shufersal and Azrieli Group, you can compare the effects of market volatilities on Shufersal 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 Shufersal with a short position of Azrieli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shufersal and Azrieli.
Diversification Opportunities for Shufersal and Azrieli
Poor diversification
The 3 months correlation between Shufersal and Azrieli is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shufersal and Azrieli Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azrieli Group and Shufersal 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 Shufersal 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 Shufersal i.e., Shufersal and Azrieli go up and down completely randomly.
Pair Corralation between Shufersal and Azrieli
Assuming the 90 days trading horizon Shufersal is expected to generate 1.57 times less return on investment than Azrieli. But when comparing it to its historical volatility, Shufersal is 1.55 times less risky than Azrieli. It trades about 0.2 of its potential returns per unit of risk. Azrieli Group is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,594,000 in Azrieli Group on August 30, 2024 and sell it today you would earn a total of 322,000 from holding Azrieli Group or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shufersal vs. Azrieli Group
Performance |
| Timeline |
| Shufersal |
| Azrieli Group |
Shufersal and Azrieli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shufersal and Azrieli
The main advantage of trading using opposite Shufersal and Azrieli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shufersal 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.| Shufersal vs. B Communications | Shufersal vs. Holmes Place International | Shufersal vs. Nova | Shufersal vs. Petrochemical |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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