Correlation Between Azrieli and G City

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

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

Diversification Opportunities for Azrieli and G City

-0.09

Correlation Coefficient

Azrieli  G City

Good diversification

The 3 months correlation between Azrieli and GCT is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Azrieli Group and G City in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G City 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 G City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G City has no effect on the direction of Azrieli i.e., Azrieli and G City go up and down completely randomly.

Pair Corralation between Azrieli and G City

Assuming the 90 days trading horizon Azrieli Group is expected to under-perform the G City. In addition to that, Azrieli is 1.07 times more volatile than G City. It trades about -0.11 of its total potential returns per unit of risk. G City is currently generating about -0.11 per unit of volatility. If you would invest  134,600  in G City on December 3, 2024 and sell it today you would lose (10,100) from holding G City or give up 7.5% of portfolio value over 90 days.

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

Azrieli Group  vs.  G City

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.

G City

Risk-Adjusted Performance

Very Weak

Over the last 90 days G City 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.

Pair Trading with Azrieli and G City

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

The idea behind Azrieli Group and G City 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.