Correlation Between Gazit Globe and Queenco L

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

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

Diversification Opportunities for Gazit Globe and Queenco L

0.28

Correlation Coefficient

Gazit Globe  Queenco L

Modest diversification

The 3 months correlation between Gazit and Queenco is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gazit Globe and Queenco L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queenco L 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 Queenco L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queenco L has no effect on the direction of Gazit Globe i.e., Gazit Globe and Queenco L go up and down completely randomly.

Pair Corralation between Gazit Globe and Queenco L

Assuming the 90 days trading horizon Gazit Globe is expected to under-perform the Queenco L. But the stock apears to be less risky and, when comparing its historical volatility, Gazit Globe is 3.0 times less risky than Queenco L. The stock trades about -0.28 of its potential returns per unit of risk. The Queenco L is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest  43,460  in Queenco L on September 28, 2024 and sell it today you would earn a total of  31,030  from holding Queenco L or generate 71.4% return on investment over 90 days.

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

Gazit Globe  vs.  Queenco L

Gazit Globe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gazit Globe has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Gazit Globe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Queenco L

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Queenco L are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Queenco L sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gazit Globe and Queenco L

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

The idea behind Gazit Globe and Queenco L 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.