Correlation Between Scope Metals and Gazit Globe
Can any of the company-specific risk be diversified away by investing in both Scope Metals and Gazit Globe 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 Scope Metals and Gazit Globe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scope Metals Group and Gazit Globe, you can compare the effects of market volatilities on Scope Metals and Gazit Globe 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 Scope Metals with a short position of Gazit Globe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scope Metals and Gazit Globe.
Diversification Opportunities for Scope Metals and Gazit Globe
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Scope and Gazit is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Scope Metals Group and Gazit Globe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gazit Globe and Scope Metals 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 Scope Metals Group are associated (or correlated) with Gazit Globe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gazit Globe has no effect on the direction of Scope Metals i.e., Scope Metals and Gazit Globe go up and down completely randomly.
Pair Corralation between Scope Metals and Gazit Globe
Assuming the 90 days trading horizon Scope Metals is expected to generate 1.15 times less return on investment than Gazit Globe. But when comparing it to its historical volatility, Scope Metals Group is 1.28 times less risky than Gazit Globe. It trades about 0.07 of its potential returns per unit of risk. Gazit Globe is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 127,000 in Gazit Globe on September 3, 2024 and sell it today you would earn a total of 29,300 from holding Gazit Globe or generate 23.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scope Metals Group vs. Gazit Globe
Performance |
| Timeline |
| Scope Metals Group |
| Gazit Globe |
Scope Metals and Gazit Globe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scope Metals and Gazit Globe
The main advantage of trading using opposite Scope Metals and Gazit Globe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scope Metals position performs unexpectedly, Gazit Globe 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 Gazit Globe will offset losses from the drop in Gazit Globe's long position.| Scope Metals vs. Delek Automotive Systems | Scope Metals vs. Kerur Holdings | Scope Metals vs. Neto ME Holdings | Scope Metals vs. Bank Leumi Le Israel |
| Gazit Globe vs. Adgar Investments and | Gazit Globe vs. B Communications | Gazit Globe vs. Hiron Trade Investments Industrial | Gazit Globe vs. Rapac Communication Infrastructure |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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