Correlation Between Avgol Industries and Gazit Globe
Can any of the company-specific risk be diversified away by investing in both Avgol Industries 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 Avgol Industries and Gazit Globe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avgol Industries 1953 and Gazit Globe, you can compare the effects of market volatilities on Avgol Industries 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 Avgol Industries with a short position of Gazit Globe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avgol Industries and Gazit Globe.
Diversification Opportunities for Avgol Industries and Gazit Globe
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avgol and Gazit is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Avgol Industries 1953 and Gazit Globe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gazit Globe and Avgol Industries 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 Avgol Industries 1953 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 Avgol Industries i.e., Avgol Industries and Gazit Globe go up and down completely randomly.
Pair Corralation between Avgol Industries and Gazit Globe
Assuming the 90 days trading horizon Avgol Industries 1953 is expected to generate 0.68 times more return on investment than Gazit Globe. However, Avgol Industries 1953 is 1.46 times less risky than Gazit Globe. It trades about -0.03 of its potential returns per unit of risk. Gazit Globe is currently generating about -0.03 per unit of risk. If you would invest 22,000 in Avgol Industries 1953 on January 26, 2024 and sell it today you would lose (9,600) from holding Avgol Industries 1953 or give up 43.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avgol Industries 1953 vs. Gazit Globe
Performance |
| Timeline |
| Avgol Industries 1953 |
| Gazit Globe |
Avgol Industries and Gazit Globe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avgol Industries and Gazit Globe
The main advantage of trading using opposite Avgol Industries and Gazit Globe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avgol Industries 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.| Avgol Industries vs. Clal Insurance Enterprises | Avgol Industries vs. Israel Discount Bank | Avgol Industries vs. Bezeq Israeli Telecommunication | Avgol Industries 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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