Correlation Between Big Shopping and Clal Industries
Can any of the company-specific risk be diversified away by investing in both Big Shopping and Clal Industries 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 Big Shopping and Clal Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Shopping Centers and Clal Industries and, you can compare the effects of market volatilities on Big Shopping and Clal Industries 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 Big Shopping with a short position of Clal Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Shopping and Clal Industries.
Diversification Opportunities for Big Shopping and Clal Industries
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Big and Clal is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Big Shopping Centers and Clal Industries and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Industries and Big Shopping 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 Big Shopping Centers are associated (or correlated) with Clal Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clal Industries has no effect on the direction of Big Shopping i.e., Big Shopping and Clal Industries go up and down completely randomly.
Pair Corralation between Big Shopping and Clal Industries
Assuming the 90 days trading horizon Big Shopping Centers is expected to under-perform the Clal Industries. But the stock apears to be less risky and, when comparing its historical volatility, Big Shopping Centers is 1.29 times less risky than Clal Industries. The stock trades about -0.07 of its potential returns per unit of risk. The Clal Industries and is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 216,700 in Clal Industries and on December 1, 2024 and sell it today you would earn a total of 5,400 from holding Clal Industries and or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Shopping Centers vs. Clal Industries and
Performance |
| Timeline |
| Big Shopping Centers |
| Clal Industries |
Big Shopping and Clal Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Shopping and Clal Industries
The main advantage of trading using opposite Big Shopping and Clal Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Shopping position performs unexpectedly, Clal Industries 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 Industries will offset losses from the drop in Clal Industries' long position.| Big Shopping vs. Azrieli Group | Big Shopping vs. Melisron | Big Shopping vs. Amot Investments | Big Shopping vs. Alony Hetz Properties |
| Clal Industries vs. First International Bank | Clal Industries vs. Aura Investments | Clal Industries vs. Meitav Trade Inv | Clal Industries vs. Libra Insurance |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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