Correlation Between Cofix and Clal Insurance
Can any of the company-specific risk be diversified away by investing in both Cofix 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 Cofix and Clal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cofix Group and Clal Insurance Enterprises, you can compare the effects of market volatilities on Cofix 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 Cofix with a short position of Clal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cofix and Clal Insurance.
Diversification Opportunities for Cofix and Clal Insurance
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cofix and Clal is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Cofix Group 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 Cofix 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 Cofix Group 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 Cofix i.e., Cofix and Clal Insurance go up and down completely randomly.
Pair Corralation between Cofix and Clal Insurance
Assuming the 90 days trading horizon Cofix Group is expected to generate 1.06 times more return on investment than Clal Insurance. However, Cofix is 1.06 times more volatile than Clal Insurance Enterprises. It trades about -0.06 of its potential returns per unit of risk. Clal Insurance Enterprises is currently generating about -0.09 per unit of risk. If you would invest 40,820 in Cofix Group on February 3, 2024 and sell it today you would lose (1,820) from holding Cofix Group or give up 4.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Cofix Group vs. Clal Insurance Enterprises
Performance |
Timeline |
Cofix Group |
Clal Insurance Enter |
Cofix and Clal Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cofix and Clal Insurance
The main advantage of trading using opposite Cofix and Clal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cofix 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.Cofix vs. Alony Hetz Properties | Cofix vs. Harel Insurance Investments | Cofix vs. Delek Group | Cofix vs. Migdal Insurance |
Clal Insurance vs. Migdal Insurance | Clal Insurance vs. Harel Insurance Investments | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. Bank Hapoalim |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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