Correlation Between Clal Insurance and Export Inv

Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Export Inv 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 Insurance and Export Inv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clal Insurance Enterprises and Export Inv, you can compare the effects of market volatilities on Clal Insurance and Export Inv 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 Insurance with a short position of Export Inv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Export Inv.

Diversification Opportunities for Clal Insurance and Export Inv

0.83

Correlation Coefficient

Clal Insurance  Export Inv

Very poor diversification

The 3 months correlation between Clal and Export is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Export Inv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Export Inv and Clal Insurance 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 Insurance Enterprises are associated (or correlated) with Export Inv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Export Inv has no effect on the direction of Clal Insurance i.e., Clal Insurance and Export Inv go up and down completely randomly.

Pair Corralation between Clal Insurance and Export Inv

Assuming the 90 days trading horizon Clal Insurance is expected to generate 1.14 times less return on investment than Export Inv. But when comparing it to its historical volatility, Clal Insurance Enterprises is 1.81 times less risky than Export Inv. It trades about 0.32 of its potential returns per unit of risk. Export Inv is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  494,200  in Export Inv on September 27, 2024 and sell it today you would earn a total of  178,800  from holding Export Inv or generate 36.18% return on investment over 90 days.

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

Clal Insurance Enterprises  vs.  Export Inv

Clal Insurance Enter

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clal Insurance Enterprises are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Clal Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Export Inv

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Export Inv are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Export Inv sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clal Insurance and Export Inv

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

The idea behind Clal Insurance Enterprises and Export Inv 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.