Correlation Between Azrieli and Big Shopping

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

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

Diversification Opportunities for Azrieli and Big Shopping

0.58

Correlation Coefficient

Azrieli  Big Shopping

Very weak diversification

The 3 months correlation between Azrieli and Big is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Azrieli Group 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 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 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 Azrieli i.e., Azrieli and Big Shopping go up and down completely randomly.

Pair Corralation between Azrieli and Big Shopping

Assuming the 90 days trading horizon Azrieli Group is expected to under-perform the Big Shopping. In addition to that, Azrieli is 1.19 times more volatile than Big Shopping Centers. It trades about -0.15 of its total potential returns per unit of risk. Big Shopping Centers is currently generating about -0.05 per unit of volatility. If you would invest  5,370,000  in Big Shopping Centers on December 30, 2024 and sell it today you would lose (228,000) from holding Big Shopping Centers or give up 4.25% of portfolio value over 90 days.

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

Azrieli Group  vs.  Big Shopping Centers

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 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.

Big Shopping Centers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Big Shopping Centers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Big Shopping 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 Big Shopping

The main advantage of trading using opposite Azrieli and Big Shopping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azrieli 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 Azrieli Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.