Correlation Between Opko Health and Clal Insurance
Can any of the company-specific risk be diversified away by investing in both Opko Health 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 Opko Health and Clal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Opko Health and Clal Insurance Enterprises, you can compare the effects of market volatilities on Opko Health 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 Opko Health with a short position of Clal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opko Health and Clal Insurance.
Diversification Opportunities for Opko Health and Clal Insurance
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Opko and Clal is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Opko Health 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 Opko Health 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 Opko Health 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 Opko Health i.e., Opko Health and Clal Insurance go up and down completely randomly.
Pair Corralation between Opko Health and Clal Insurance
Assuming the 90 days trading horizon Opko Health is expected to generate 2.01 times more return on investment than Clal Insurance. However, Opko Health is 2.01 times more volatile than Clal Insurance Enterprises. It trades about 0.47 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 34,440 in Opko Health on January 25, 2024 and sell it today you would earn a total of 13,430 from holding Opko Health or generate 39.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Opko Health vs. Clal Insurance Enterprises
Performance |
| Timeline |
| Opko Health |
| Clal Insurance Enter |
Opko Health and Clal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Opko Health and Clal Insurance
The main advantage of trading using opposite Opko Health and Clal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opko Health 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.| Opko Health vs. Teva Pharmaceutical Industries | Opko Health vs. Tower Semiconductor | Opko Health vs. Nice | Opko Health vs. Kamada |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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