Correlation Between Azrieli and Axilion Smart

Can any of the company-specific risk be diversified away by investing in both Azrieli and Axilion Smart 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 Azrieli and Axilion Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Azrieli Group and Axilion Smart Mobility, you can compare the effects of market volatilities on Azrieli and Axilion Smart 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 Azrieli with a short position of Axilion Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azrieli and Axilion Smart.

Diversification Opportunities for Azrieli and Axilion Smart

0.49

Correlation Coefficient

Azrieli  Axilion Smart

Very weak diversification

The 3 months correlation between Azrieli and Axilion is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Azrieli Group and Axilion Smart Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axilion Smart Mobility and Azrieli 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 Azrieli Group are associated (or correlated) with Axilion Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axilion Smart Mobility has no effect on the direction of Azrieli i.e., Azrieli and Axilion Smart go up and down completely randomly.

Pair Corralation between Azrieli and Axilion Smart

Assuming the 90 days trading horizon Azrieli is expected to generate 1.48 times less return on investment than Axilion Smart. But when comparing it to its historical volatility, Azrieli Group is 3.48 times less risky than Axilion Smart. It trades about 0.17 of its potential returns per unit of risk. Axilion Smart Mobility is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4,220  in Axilion Smart Mobility on September 28, 2024 and sell it today you would earn a total of  600.00  from holding Axilion Smart Mobility or generate 14.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Azrieli Group  vs.  Axilion Smart Mobility

Azrieli Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Azrieli Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Azrieli sustained solid returns over the last few months and may actually be approaching a breakup point.

Axilion Smart Mobility

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Axilion Smart Mobility are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Axilion Smart sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Azrieli and Axilion Smart

The main advantage of trading using opposite Azrieli and Axilion Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azrieli position performs unexpectedly, Axilion Smart 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 Axilion Smart will offset losses from the drop in Axilion Smart's long position.

The idea behind Azrieli Group and Axilion Smart Mobility 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.