Correlation Between Clal Biotechnology and More Mutual

Can any of the company-specific risk be diversified away by investing in both Clal Biotechnology and More Mutual 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 More Mutual 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 More Mutual Funds, you can compare the effects of market volatilities on Clal Biotechnology and More Mutual 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 More Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Biotechnology and More Mutual.

Diversification Opportunities for Clal Biotechnology and More Mutual

-0.79

Correlation Coefficient

Clal Biotechnology  More Mutual

Pay attention - limited upside

The 3 months correlation between Clal and More is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Clal Biotechnology Industries and More Mutual Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on More Mutual Funds 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 More Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of More Mutual Funds has no effect on the direction of Clal Biotechnology i.e., Clal Biotechnology and More Mutual go up and down completely randomly.

Pair Corralation between Clal Biotechnology and More Mutual

Assuming the 90 days trading horizon Clal Biotechnology Industries is expected to under-perform the More Mutual. In addition to that, Clal Biotechnology is 2.25 times more volatile than More Mutual Funds. It trades about -0.08 of its total potential returns per unit of risk. More Mutual Funds is currently generating about 0.11 per unit of volatility. If you would invest  652,500  in More Mutual Funds on September 30, 2024 and sell it today you would earn a total of  9,400  from holding More Mutual Funds or generate 1.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Clal Biotechnology Industries  vs.  More Mutual Funds

Clal Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clal Biotechnology Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

More Mutual Funds

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in More Mutual Funds are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, More Mutual sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clal Biotechnology and More Mutual

The main advantage of trading using opposite Clal Biotechnology and More Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Biotechnology position performs unexpectedly, More Mutual 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 More Mutual will offset losses from the drop in More Mutual's long position.

The idea behind Clal Biotechnology Industries and More Mutual Funds pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.