Correlation Between Azrieli and GavYam Lands

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

By analyzing existing cross correlation between Azrieli Group and GavYam Lands Corp, you can compare the effects of market volatilities on Azrieli and GavYam Lands 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 GavYam Lands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azrieli and GavYam Lands.

Diversification Opportunities for Azrieli and GavYam Lands

0.47

Correlation Coefficient

Azrieli  GavYam Lands

Very weak diversification

The 3 months correlation between Azrieli and GavYam is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Azrieli Group and GavYam Lands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GavYam Lands Corp 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 GavYam Lands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GavYam Lands Corp has no effect on the direction of Azrieli i.e., Azrieli and GavYam Lands go up and down completely randomly.

Pair Corralation between Azrieli and GavYam Lands

Assuming the 90 days trading horizon Azrieli Group is expected to generate 1.38 times more return on investment than GavYam Lands. However, Azrieli is 1.38 times more volatile than GavYam Lands Corp. It trades about 0.17 of its potential returns per unit of risk. GavYam Lands Corp is currently generating about 0.02 per unit of risk. If you would invest  2,450,000  in Azrieli Group on September 15, 2024 and sell it today you would earn a total of  390,000  from holding Azrieli Group or generate 15.92% 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.  GavYam Lands Corp

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 weak basic indicators, Azrieli sustained solid returns over the last few months and may actually be approaching a breakup point.

GavYam Lands Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GavYam Lands Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, GavYam Lands is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Azrieli and GavYam Lands

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

The idea behind Azrieli Group and GavYam Lands Corp 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.