Correlation Between Alrov Properties and Gazit Globe

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Can any of the company-specific risk be diversified away by investing in both Alrov Properties 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 Alrov Properties and Gazit Globe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alrov Properties Lodgings and Gazit Globe, you can compare the effects of market volatilities on Alrov Properties 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 Alrov Properties with a short position of Gazit Globe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alrov Properties and Gazit Globe.

Diversification Opportunities for Alrov Properties and Gazit Globe

-0.3
  Correlation Coefficient

Very good diversification

The 3 months correlation between Alrov and Gazit is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Alrov Properties Lodgings and Gazit Globe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gazit Globe and Alrov Properties 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 Alrov Properties Lodgings 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 Alrov Properties i.e., Alrov Properties and Gazit Globe go up and down completely randomly.

Pair Corralation between Alrov Properties and Gazit Globe

Assuming the 90 days trading horizon Alrov Properties Lodgings is expected to generate 0.71 times more return on investment than Gazit Globe. However, Alrov Properties Lodgings is 1.4 times less risky than Gazit Globe. It trades about 0.25 of its potential returns per unit of risk. Gazit Globe is currently generating about 0.08 per unit of risk. If you would invest  1,443,000  in Alrov Properties Lodgings on December 29, 2023 and sell it today you would earn a total of  69,000  from holding Alrov Properties Lodgings or generate 4.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Alrov Properties Lodgings  vs.  Gazit Globe

 Performance 
       Timeline  
Alrov Properties Lodgings 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Alrov Properties Lodgings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Alrov Properties unveiled solid returns over the last few months and may actually be approaching a breakup point.
Gazit Globe 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Gazit Globe has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Alrov Properties and Gazit Globe Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alrov Properties and Gazit Globe

The main advantage of trading using opposite Alrov Properties and Gazit Globe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alrov Properties 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.
The idea behind Alrov Properties Lodgings and Gazit Globe pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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