Correlation Between Gazit Globe and Big Shopping

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

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

Diversification Opportunities for Gazit Globe and Big Shopping

0.69

Correlation Coefficient

Gazit Globe  Big Shopping

Poor diversification

The 3 months correlation between Gazit and Big is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gazit Globe and Big Shopping Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Shopping Centers and Gazit Globe 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 Gazit Globe are associated (or correlated) with Big Shopping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Shopping Centers has no effect on the direction of Gazit Globe i.e., Gazit Globe and Big Shopping go up and down completely randomly.

Pair Corralation between Gazit Globe and Big Shopping

Assuming the 90 days trading horizon Gazit Globe is expected to generate 4.68 times less return on investment than Big Shopping. In addition to that, Gazit Globe is 1.85 times more volatile than Big Shopping Centers. It trades about 0.05 of its total potential returns per unit of risk. Big Shopping Centers is currently generating about 0.41 per unit of volatility. If you would invest  4,100,000  in Big Shopping Centers on September 26, 2024 and sell it today you would earn a total of  1,283,000  from holding Big Shopping Centers or generate 31.29% return on investment over 90 days.

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

Gazit Globe  vs.  Big Shopping Centers

Gazit Globe

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gazit Globe are ranked lower than 3 (%) 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.

Big Shopping Centers

Risk-Adjusted Performance

32 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Big Shopping Centers are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Big Shopping sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gazit Globe and Big Shopping

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

The idea behind Gazit Globe and Big Shopping Centers 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.