Correlation Between Bonus Biogroup and Clal Biotechnology
Can any of the company-specific risk be diversified away by investing in both Bonus Biogroup 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 Bonus Biogroup and Clal Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bonus Biogroup and Clal Biotechnology Industries, you can compare the effects of market volatilities on Bonus Biogroup 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 Bonus Biogroup with a short position of Clal Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonus Biogroup and Clal Biotechnology.
Diversification Opportunities for Bonus Biogroup and Clal Biotechnology
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bonus and Clal is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bonus Biogroup and Clal Biotechnology Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Biotechnology and Bonus Biogroup 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 Bonus Biogroup 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 Bonus Biogroup i.e., Bonus Biogroup and Clal Biotechnology go up and down completely randomly.
Pair Corralation between Bonus Biogroup and Clal Biotechnology
Assuming the 90 days trading horizon Bonus Biogroup is expected to under-perform the Clal Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Bonus Biogroup is 1.37 times less risky than Clal Biotechnology. The stock trades about -0.42 of its potential returns per unit of risk. The Clal Biotechnology Industries is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 3,780 in Clal Biotechnology Industries on September 3, 2024 and sell it today you would lose (100.00) from holding Clal Biotechnology Industries or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bonus Biogroup vs. Clal Biotechnology Industries
Performance |
| Timeline |
| Bonus Biogroup |
| Clal Biotechnology |
Bonus Biogroup and Clal Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bonus Biogroup and Clal Biotechnology
The main advantage of trading using opposite Bonus Biogroup and Clal Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonus Biogroup 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.| Bonus Biogroup vs. Bezeq Israeli Telecommunication | Bonus Biogroup vs. El Al Israel | Bonus Biogroup vs. Bank Leumi Le Israel | Bonus Biogroup vs. Elbit Systems |
| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. BioLine RX | Clal Biotechnology vs. Evogene | Clal Biotechnology vs. Bezeq Israeli Telecommunication |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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