Correlation Between Tel Aviv and Big Shopping
Can any of the company-specific risk be diversified away by investing in both Tel Aviv and Big Shopping 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 Tel Aviv and Big Shopping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tel Aviv 35 and Big Shopping Centers, you can compare the effects of market volatilities on Tel Aviv and Big Shopping 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 Tel Aviv with a short position of Big Shopping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tel Aviv and Big Shopping.
Diversification Opportunities for Tel Aviv and Big Shopping
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tel and Big is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Tel Aviv 35 and Big Shopping Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Shopping Centers and Tel Aviv 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 Tel Aviv 35 are associated (or correlated) with Big Shopping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Shopping Centers has no effect on the direction of Tel Aviv i.e., Tel Aviv and Big Shopping go up and down completely randomly.
Pair Corralation between Tel Aviv and Big Shopping
Assuming the 90 days trading horizon Tel Aviv is expected to generate 1.37 times less return on investment than Big Shopping. But when comparing it to its historical volatility, Tel Aviv 35 is 1.53 times less risky than Big Shopping. It trades about 0.29 of its potential returns per unit of risk. Big Shopping Centers is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 4,149,000 in Big Shopping Centers on August 28, 2024 and sell it today you would earn a total of 421,000 from holding Big Shopping Centers or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tel Aviv 35 vs. Big Shopping Centers
Performance |
| Timeline |
Tel Aviv and Big Shopping Volatility Contrast
Predicted Return Density |
| Returns |
Tel Aviv 35
Pair trading matchups for Tel Aviv
Big Shopping Centers
Pair trading matchups for Big Shopping
Pair Trading with Tel Aviv and Big Shopping
The main advantage of trading using opposite Tel Aviv and Big Shopping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tel Aviv position performs unexpectedly, Big Shopping 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 Big Shopping will offset losses from the drop in Big Shopping's long position.| Tel Aviv vs. MEITAV INVESTMENTS HOUSE | Tel Aviv vs. Azorim Investment Development | Tel Aviv vs. IBI Mutual Funds | Tel Aviv vs. Arad Investment Industrial |
| Big Shopping vs. Azrieli Group | Big Shopping vs. Melisron | Big Shopping vs. Amot Investments | Big Shopping vs. Alony Hetz Properties |
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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