Correlation Between Automatic Bank and Clal Insurance

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Automatic Bank 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 Automatic Bank and Clal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automatic Bank Services and Clal Insurance Enterprises, you can compare the effects of market volatilities on Automatic Bank 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 Automatic Bank with a short position of Clal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Bank and Clal Insurance.

Diversification Opportunities for Automatic Bank and Clal Insurance

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between Automatic and Clal is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Bank Services 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 Automatic Bank 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 Automatic Bank Services 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 Automatic Bank i.e., Automatic Bank and Clal Insurance go up and down completely randomly.

Pair Corralation between Automatic Bank and Clal Insurance

Assuming the 90 days trading horizon Automatic Bank Services is expected to generate 1.37 times more return on investment than Clal Insurance. However, Automatic Bank is 1.37 times more volatile than Clal Insurance Enterprises. It trades about 0.32 of its potential returns per unit of risk. Clal Insurance Enterprises is currently generating about 0.32 per unit of risk. If you would invest  155,500  in Automatic Bank Services on September 30, 2024 and sell it today you would earn a total of  74,100  from holding Automatic Bank Services or generate 47.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Automatic Bank Services  vs.  Clal Insurance Enterprises

 Performance 
       Timeline  
Automatic Bank Services 

Risk-Adjusted Performance

25 of 100

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

Risk-Adjusted Performance

25 of 100

 
Weak
 
Strong
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.

Automatic Bank and Clal Insurance Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Automatic Bank and Clal Insurance

The main advantage of trading using opposite Automatic Bank and Clal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Bank 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.
The idea behind Automatic Bank Services and Clal Insurance Enterprises 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

Other Complementary Tools

CEOs Directory
Screen CEOs from public companies around the world
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance