Correlation Between Israel China and Clal Insurance
Can any of the company-specific risk be diversified away by investing in both Israel China 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 Israel China and Clal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel China Biotechnology and Clal Insurance Enterprises, you can compare the effects of market volatilities on Israel China 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 Israel China with a short position of Clal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel China and Clal Insurance.
Diversification Opportunities for Israel China and Clal Insurance
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Israel and Clal is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Israel China Biotechnology 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 Israel China 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 Israel China Biotechnology 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 Israel China i.e., Israel China and Clal Insurance go up and down completely randomly.
Pair Corralation between Israel China and Clal Insurance
Assuming the 90 days trading horizon Israel China Biotechnology is expected to generate 14.07 times more return on investment than Clal Insurance. However, Israel China is 14.07 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 -0.3 per unit of risk. If you would invest 65,000 in Israel China Biotechnology on January 20, 2024 and sell it today you would earn a total of 12,000 from holding Israel China Biotechnology or generate 18.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Israel China Biotechnology vs. Clal Insurance Enterprises
Performance |
| Timeline |
| Israel China Biotech |
| Clal Insurance Enter |
Israel China and Clal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel China and Clal Insurance
The main advantage of trading using opposite Israel China and Clal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel China 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.| Israel China vs. YD More Investments | Israel China vs. MEITAV INVESTMENTS HOUSE | Israel China vs. Menif Financial Services | Israel China vs. Altshuler Shaham Financial |
| Clal Insurance vs. Rani Zim Shopping | Clal Insurance vs. Accel Solutions Group | Clal Insurance vs. Rapac Communication Infrastructure |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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