Correlation Between Plaza Centers and Global Knafaim

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

By analyzing existing cross correlation between Plaza Centers NV and Global Knafaim Leasing, you can compare the effects of market volatilities on Plaza Centers and Global Knafaim 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 Plaza Centers with a short position of Global Knafaim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Centers and Global Knafaim.

Diversification Opportunities for Plaza Centers and Global Knafaim

-0.75

Correlation Coefficient

Plaza Centers  Global Knafaim

Pay attention - limited upside

The 3 months correlation between Plaza and Global is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Centers NV and Global Knafaim Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Knafaim Leasing and Plaza Centers 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 Plaza Centers NV are associated (or correlated) with Global Knafaim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Knafaim Leasing has no effect on the direction of Plaza Centers i.e., Plaza Centers and Global Knafaim go up and down completely randomly.

Pair Corralation between Plaza Centers and Global Knafaim

Assuming the 90 days trading horizon Plaza Centers NV is expected to under-perform the Global Knafaim. In addition to that, Plaza Centers is 2.07 times more volatile than Global Knafaim Leasing. It trades about -0.16 of its total potential returns per unit of risk. Global Knafaim Leasing is currently generating about 0.07 per unit of volatility. If you would invest  7,470  in Global Knafaim Leasing on December 3, 2024 and sell it today you would earn a total of  480.00  from holding Global Knafaim Leasing or generate 6.43% return on investment over 90 days.

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

Plaza Centers NV  vs.  Global Knafaim Leasing

Plaza Centers NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Plaza Centers NV 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.

Global Knafaim Leasing

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Knafaim Leasing are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Global Knafaim may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Plaza Centers and Global Knafaim

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

The idea behind Plaza Centers NV and Global Knafaim Leasing 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.