Correlation Between Delek and Gazit Globe

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

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

Diversification Opportunities for Delek and Gazit Globe

0.87

Correlation Coefficient

Delek  Gazit Globe

Very poor diversification

The 3 months correlation between Delek and Gazit is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Gazit Globe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gazit Globe and Delek 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 Delek Group 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 Delek i.e., Delek and Gazit Globe go up and down completely randomly.

Pair Corralation between Delek and Gazit Globe

Assuming the 90 days trading horizon Delek Group is expected to generate 0.64 times more return on investment than Gazit Globe. However, Delek Group is 1.57 times less risky than Gazit Globe. It trades about 0.22 of its potential returns per unit of risk. Gazit Globe is currently generating about 0.06 per unit of risk. If you would invest  3,920,594  in Delek Group on September 24, 2024 and sell it today you would earn a total of  719,406  from holding Delek Group or generate 18.35% return on investment over 90 days.

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

Delek Group  vs.  Gazit Globe

Delek Group

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Delek unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gazit Globe

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gazit Globe are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gazit Globe may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Delek and Gazit Globe

The main advantage of trading using opposite Delek and Gazit Globe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek 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 Delek Group 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.