Correlation Between Apollo Power and Clal Insurance
Can any of the company-specific risk be diversified away by investing in both Apollo Power and Clal Insurance 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 Apollo Power and Clal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Power and Clal Insurance Enterprises, you can compare the effects of market volatilities on Apollo Power and Clal Insurance 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 Apollo Power with a short position of Clal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Power and Clal Insurance.
Diversification Opportunities for Apollo Power and Clal Insurance
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apollo and Clal is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Power and Clal Insurance Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Insurance Enter and Apollo Power 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 Apollo Power are associated (or correlated) with Clal Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clal Insurance Enter has no effect on the direction of Apollo Power i.e., Apollo Power and Clal Insurance go up and down completely randomly.
Pair Corralation between Apollo Power and Clal Insurance
Assuming the 90 days trading horizon Apollo Power is expected to generate 5.23 times more return on investment than Clal Insurance. However, Apollo Power is 5.23 times more volatile than Clal Insurance Enterprises. It trades about 0.12 of its potential returns per unit of risk. Clal Insurance Enterprises is currently generating about 0.23 per unit of risk. If you would invest 60,460 in Apollo Power on December 29, 2023 and sell it today you would earn a total of 6,310 from holding Apollo Power or generate 10.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Apollo Power vs. Clal Insurance Enterprises
Performance |
Timeline |
Apollo Power |
Clal Insurance Enter |
Apollo Power and Clal Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apollo Power and Clal Insurance
The main advantage of trading using opposite Apollo Power and Clal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Power position performs unexpectedly, Clal Insurance 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 Clal Insurance will offset losses from the drop in Clal Insurance's long position.Apollo Power vs. Discount Investment Corp | Apollo Power vs. Azorim Investment Development | Apollo Power vs. Seach Medical Group | Apollo Power vs. More Provident Funds |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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