Correlation Between Azrieli and Hiron Trade

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

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

Diversification Opportunities for Azrieli and Hiron Trade

0.66

Correlation Coefficient

Azrieli  Hiron Trade

Poor diversification

The 3 months correlation between Azrieli and Hiron is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Azrieli Group and Hiron Trade Investments Indust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hiron Trade Investments 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 Hiron Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hiron Trade Investments has no effect on the direction of Azrieli i.e., Azrieli and Hiron Trade go up and down completely randomly.

Pair Corralation between Azrieli and Hiron Trade

Assuming the 90 days trading horizon Azrieli Group is expected to under-perform the Hiron Trade. In addition to that, Azrieli is 1.26 times more volatile than Hiron Trade Investments Industrial. It trades about -0.15 of its total potential returns per unit of risk. Hiron Trade Investments Industrial is currently generating about -0.05 per unit of volatility. If you would invest  22,843,100  in Hiron Trade Investments Industrial on December 30, 2024 and sell it today you would lose (1,050,100) from holding Hiron Trade Investments Industrial or give up 4.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.08%
Values	Daily Returns

Azrieli Group  vs.  Hiron Trade Investments Indust

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.

Hiron Trade Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hiron Trade Investments Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hiron Trade 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 Hiron Trade

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

The idea behind Azrieli Group and Hiron Trade Investments Industrial 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.