Correlation Between Bram Indus and Clal Insurance
Can any of the company-specific risk be diversified away by investing in both Bram Indus 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 Bram Indus and Clal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bram Indus and Clal Insurance Enterprises, you can compare the effects of market volatilities on Bram Indus 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 Bram Indus with a short position of Clal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bram Indus and Clal Insurance.
Diversification Opportunities for Bram Indus and Clal Insurance
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bram and Clal is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bram Indus 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 Bram Indus 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 Bram Indus 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 Bram Indus i.e., Bram Indus and Clal Insurance go up and down completely randomly.
Pair Corralation between Bram Indus and Clal Insurance
Assuming the 90 days trading horizon Bram Indus is expected to generate 2.25 times more return on investment than Clal Insurance. However, Bram Indus is 2.25 times more volatile than Clal Insurance Enterprises. It trades about 0.25 of its potential returns per unit of risk. Clal Insurance Enterprises is currently generating about 0.37 per unit of risk. If you would invest 15,450 in Bram Indus on September 13, 2024 and sell it today you would earn a total of 3,450 from holding Bram Indus or generate 22.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Bram Indus vs. Clal Insurance Enterprises
Performance |
| Timeline |
| Bram Indus |
| Clal Insurance Enter |
Bram Indus and Clal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bram Indus and Clal Insurance
The main advantage of trading using opposite Bram Indus and Clal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bram Indus 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.| Bram Indus vs. Hiron Trade Investments Industrial | Bram Indus vs. Polyram Plastic Industries | Bram Indus vs. Scope Metals Group | Bram Indus vs. Gilat Telecom Global |
| Clal Insurance vs. Bank Hapoalim | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. Mizrahi Tefahot | Clal Insurance 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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