Correlation Between Clal Insurance and EN Shoham
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and EN Shoham 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 EN Shoham 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 EN Shoham Business, you can compare the effects of market volatilities on Clal Insurance and EN Shoham 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 EN Shoham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and EN Shoham.
Diversification Opportunities for Clal Insurance and EN Shoham
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clal and SHOM is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and EN Shoham Business in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EN Shoham Business 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 EN Shoham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EN Shoham Business has no effect on the direction of Clal Insurance i.e., Clal Insurance and EN Shoham go up and down completely randomly.
Pair Corralation between Clal Insurance and EN Shoham
Assuming the 90 days trading horizon Clal Insurance is expected to generate 1.07 times less return on investment than EN Shoham. In addition to that, Clal Insurance is 1.03 times more volatile than EN Shoham Business. It trades about 0.4 of its total potential returns per unit of risk. EN Shoham Business is currently generating about 0.44 per unit of volatility. If you would invest 52,316 in EN Shoham Business on September 25, 2024 and sell it today you would earn a total of 25,084 from holding EN Shoham Business or generate 47.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Clal Insurance Enterprises vs. EN Shoham Business
Performance |
Timeline |
Clal Insurance Enter |
EN Shoham Business |
Clal Insurance and EN Shoham Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Clal Insurance and EN Shoham
The main advantage of trading using opposite Clal Insurance and EN Shoham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, EN Shoham 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 EN Shoham will offset losses from the drop in EN Shoham's long position.Clal Insurance vs. Migdal Insurance | Clal Insurance vs. Harel Insurance Investments | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. Bank Hapoalim |
EN Shoham vs. Harel Insurance Investments | EN Shoham vs. Clal Insurance Enterprises | EN Shoham vs. Bank Hapoalim | EN Shoham vs. Bank Leumi Le Israel |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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