Correlation Between Big Shopping and Electra
Can any of the company-specific risk be diversified away by investing in both Big Shopping and Electra 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 Big Shopping and Electra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Shopping Centers and Electra, you can compare the effects of market volatilities on Big Shopping and Electra 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 Big Shopping with a short position of Electra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Shopping and Electra.
Diversification Opportunities for Big Shopping and Electra
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Big and Electra is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Big Shopping Centers and Electra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electra and Big Shopping 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 Big Shopping Centers are associated (or correlated) with Electra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electra has no effect on the direction of Big Shopping i.e., Big Shopping and Electra go up and down completely randomly.
Pair Corralation between Big Shopping and Electra
Assuming the 90 days trading horizon Big Shopping Centers is expected to generate 0.7 times more return on investment than Electra. However, Big Shopping Centers is 1.42 times less risky than Electra. It trades about -0.19 of its potential returns per unit of risk. Electra is currently generating about -0.21 per unit of risk. If you would invest 4,060,000 in Big Shopping Centers on January 30, 2024 and sell it today you would lose (190,000) from holding Big Shopping Centers or give up 4.68% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Big Shopping Centers vs. Electra
Performance |
Timeline |
Big Shopping Centers |
Electra |
Big Shopping and Electra Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Big Shopping and Electra
The main advantage of trading using opposite Big Shopping and Electra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Shopping position performs unexpectedly, Electra 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 Electra will offset losses from the drop in Electra's long position.Big Shopping vs. Shikun Binui | Big Shopping vs. Ashtrom Group | Big Shopping vs. Enlight Renewable Energy |
Electra vs. Nice | Electra vs. Bank Leumi Le Israel | Electra vs. Teva Pharmaceutical Industries | Electra vs. Bank Hapoalim |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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