Correlation Between Electra Real and Argo Properties
Can any of the company-specific risk be diversified away by investing in both Electra Real and Argo Properties 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 Electra Real and Argo Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electra Real Estate and Argo Properties NV, you can compare the effects of market volatilities on Electra Real and Argo Properties 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 Electra Real with a short position of Argo Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Real and Argo Properties.
Diversification Opportunities for Electra Real and Argo Properties
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Electra and Argo is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Electra Real Estate and Argo Properties NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Properties NV and Electra Real 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 Electra Real Estate are associated (or correlated) with Argo Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Properties NV has no effect on the direction of Electra Real i.e., Electra Real and Argo Properties go up and down completely randomly.
Pair Corralation between Electra Real and Argo Properties
Assuming the 90 days trading horizon Electra Real is expected to generate 2.52 times less return on investment than Argo Properties. In addition to that, Electra Real is 1.21 times more volatile than Argo Properties NV. It trades about 0.01 of its total potential returns per unit of risk. Argo Properties NV is currently generating about 0.03 per unit of volatility. If you would invest 990,100 in Argo Properties NV on December 30, 2024 and sell it today you would earn a total of 21,900 from holding Argo Properties NV or generate 2.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Electra Real Estate vs. Argo Properties NV
Performance |
Timeline |
Electra Real Estate |
Argo Properties NV |
Electra Real and Argo Properties Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Electra Real and Argo Properties
The main advantage of trading using opposite Electra Real and Argo Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Real position performs unexpectedly, Argo Properties 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 Argo Properties will offset losses from the drop in Argo Properties' long position.Electra Real vs. Azrieli Group | Electra Real vs. Israel Discount Bank | Electra Real vs. Alony Hetz Properties | Electra Real vs. Shufersal |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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