Correlation Between Augwind Energy and Clal Biotechnology
Can any of the company-specific risk be diversified away by investing in both Augwind Energy and Clal Biotechnology 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 Augwind Energy and Clal Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Augwind Energy Tech and Clal Biotechnology Industries, you can compare the effects of market volatilities on Augwind Energy and Clal Biotechnology 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 Augwind Energy with a short position of Clal Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Augwind Energy and Clal Biotechnology.
Diversification Opportunities for Augwind Energy and Clal Biotechnology
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Augwind and Clal is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Augwind Energy Tech and Clal Biotechnology Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Biotechnology and Augwind Energy 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 Augwind Energy Tech are associated (or correlated) with Clal Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clal Biotechnology has no effect on the direction of Augwind Energy i.e., Augwind Energy and Clal Biotechnology go up and down completely randomly.
Pair Corralation between Augwind Energy and Clal Biotechnology
Assuming the 90 days trading horizon Augwind Energy Tech is expected to generate 3.45 times more return on investment than Clal Biotechnology. However, Augwind Energy is 3.45 times more volatile than Clal Biotechnology Industries. It trades about 0.24 of its potential returns per unit of risk. Clal Biotechnology Industries is currently generating about -0.07 per unit of risk. If you would invest 50,000 in Augwind Energy Tech on September 3, 2024 and sell it today you would earn a total of 13,610 from holding Augwind Energy Tech or generate 27.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Augwind Energy Tech vs. Clal Biotechnology Industries
Performance |
| Timeline |
| Augwind Energy Tech |
| Clal Biotechnology |
Augwind Energy and Clal Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Augwind Energy and Clal Biotechnology
The main advantage of trading using opposite Augwind Energy and Clal Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Augwind Energy position performs unexpectedly, Clal Biotechnology 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 Biotechnology will offset losses from the drop in Clal Biotechnology's long position.| Augwind Energy vs. Aquarius Engines AM | Augwind Energy vs. Highcon Systems | Augwind Energy vs. Brainsway | Augwind Energy vs. Mivne Real Estate |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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