Correlation Between Kardan Israel and Clal Insurance
Can any of the company-specific risk be diversified away by investing in both Kardan Israel 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 Kardan Israel and Clal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kardan Israel and Clal Insurance Enterprises, you can compare the effects of market volatilities on Kardan Israel 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 Kardan Israel with a short position of Clal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kardan Israel and Clal Insurance.
Diversification Opportunities for Kardan Israel and Clal Insurance
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kardan and Clal is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kardan Israel 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 Kardan Israel 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 Kardan Israel 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 Kardan Israel i.e., Kardan Israel and Clal Insurance go up and down completely randomly.
Pair Corralation between Kardan Israel and Clal Insurance
Assuming the 90 days trading horizon Kardan Israel is expected to generate 0.69 times more return on investment than Clal Insurance. However, Kardan Israel is 1.46 times less risky than Clal Insurance. It trades about 0.03 of its potential returns per unit of risk. Clal Insurance Enterprises is currently generating about -0.31 per unit of risk. If you would invest 22,060 in Kardan Israel on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Kardan Israel or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kardan Israel vs. Clal Insurance Enterprises
Performance |
| Timeline |
| Kardan Israel |
| Clal Insurance Enter |
Kardan Israel and Clal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kardan Israel and Clal Insurance
The main advantage of trading using opposite Kardan Israel and Clal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kardan Israel 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.| Kardan Israel vs. Azrieli Group | Kardan Israel vs. Melisron | Kardan Israel vs. Amot Investments | Kardan Israel vs. Mivne Real Estate |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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