Correlation Between Clal Biotechnology and Israel Corp
Can any of the company-specific risk be diversified away by investing in both Clal Biotechnology and Israel Corp 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 Clal Biotechnology and Israel Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clal Biotechnology Industries and Israel Corp, you can compare the effects of market volatilities on Clal Biotechnology and Israel Corp 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 Clal Biotechnology with a short position of Israel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Biotechnology and Israel Corp.
Diversification Opportunities for Clal Biotechnology and Israel Corp
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clal and Israel is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Clal Biotechnology Industries and Israel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Corp and Clal Biotechnology 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 Clal Biotechnology Industries are associated (or correlated) with Israel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Corp has no effect on the direction of Clal Biotechnology i.e., Clal Biotechnology and Israel Corp go up and down completely randomly.
Pair Corralation between Clal Biotechnology and Israel Corp
Assuming the 90 days trading horizon Clal Biotechnology is expected to generate 2.02 times less return on investment than Israel Corp. In addition to that, Clal Biotechnology is 1.97 times more volatile than Israel Corp. It trades about 0.01 of its total potential returns per unit of risk. Israel Corp is currently generating about 0.03 per unit of volatility. If you would invest 9,140,550 in Israel Corp on September 14, 2024 and sell it today you would earn a total of 748,450 from holding Israel Corp or generate 8.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Clal Biotechnology Industries vs. Israel Corp
Performance |
Timeline |
Clal Biotechnology |
Israel Corp |
Clal Biotechnology and Israel Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Clal Biotechnology and Israel Corp
The main advantage of trading using opposite Clal Biotechnology and Israel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Biotechnology position performs unexpectedly, Israel Corp 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 Israel Corp will offset losses from the drop in Israel Corp's long position.Clal Biotechnology vs. Kamada | Clal Biotechnology vs. Bezeq Israeli Telecommunication | Clal Biotechnology vs. B Communications | Clal Biotechnology vs. Photomyne |
Israel Corp vs. Bezeq Israeli Telecommunication | Israel Corp vs. Harel Insurance Investments | Israel Corp vs. Storage Drop Storage | Israel Corp vs. ICL Israel Chemicals |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |