Correlation Between Ashtrom and Azrieli

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

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

Diversification Opportunities for Ashtrom and Azrieli

-0.16

Correlation Coefficient

Ashtrom  Azrieli

Good diversification

The 3 months correlation between Ashtrom and Azrieli is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ashtrom Group and Azrieli Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azrieli Group and Ashtrom 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 Ashtrom Group are associated (or correlated) with Azrieli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azrieli Group has no effect on the direction of Ashtrom i.e., Ashtrom and Azrieli go up and down completely randomly.

Pair Corralation between Ashtrom and Azrieli

Assuming the 90 days trading horizon Ashtrom Group is expected to under-perform the Azrieli. But the stock apears to be less risky and, when comparing its historical volatility, Ashtrom Group is 1.04 times less risky than Azrieli. The stock trades about -0.11 of its potential returns per unit of risk. The Azrieli Group is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  2,899,000  in Azrieli Group on December 2, 2024 and sell it today you would lose (141,000) from holding Azrieli Group or give up 4.86% of portfolio value over 90 days.

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

Ashtrom Group  vs.  Azrieli Group

Ashtrom Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ashtrom Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Azrieli Group

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Ashtrom and Azrieli

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

The idea behind Ashtrom Group and Azrieli Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.