Correlation Between Azrieli and Neto Malinda

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

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

Diversification Opportunities for Azrieli and Neto Malinda

0.9

Correlation Coefficient

Azrieli  Neto Malinda

Almost no diversification

The 3 months correlation between Azrieli and Neto is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Azrieli Group and Neto Malinda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neto Malinda 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 Neto Malinda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neto Malinda has no effect on the direction of Azrieli i.e., Azrieli and Neto Malinda go up and down completely randomly.

Pair Corralation between Azrieli and Neto Malinda

Assuming the 90 days trading horizon Azrieli Group is expected to generate 1.22 times more return on investment than Neto Malinda. However, Azrieli is 1.22 times more volatile than Neto Malinda. It trades about 0.27 of its potential returns per unit of risk. Neto Malinda is currently generating about 0.33 per unit of risk. If you would invest  2,667,000  in Azrieli Group on April 24, 2025 and sell it today you would earn a total of  751,000  from holding Azrieli Group or generate 28.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	97.96%
Values	Daily Returns

Azrieli Group  vs.  Neto Malinda

Azrieli Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Azrieli Group are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Azrieli sustained solid returns over the last few months and may actually be approaching a breakup point.

Neto Malinda

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Neto Malinda are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Neto Malinda sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Azrieli and Neto Malinda

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

The idea behind Azrieli Group and Neto Malinda 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.