Correlation Between Clal Biotechnology and Augwind Energy
Can any of the company-specific risk be diversified away by investing in both Clal Biotechnology and Augwind Energy 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 Clal Biotechnology and Augwind Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clal Biotechnology Industries and Augwind Energy Tech, you can compare the effects of market volatilities on Clal Biotechnology and Augwind Energy 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 Clal Biotechnology with a short position of Augwind Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Biotechnology and Augwind Energy.
Diversification Opportunities for Clal Biotechnology and Augwind Energy
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clal and Augwind is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Clal Biotechnology Industries and Augwind Energy Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Augwind Energy Tech and Clal Biotechnology 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 Clal Biotechnology Industries are associated (or correlated) with Augwind Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Augwind Energy Tech has no effect on the direction of Clal Biotechnology i.e., Clal Biotechnology and Augwind Energy go up and down completely randomly.
Pair Corralation between Clal Biotechnology and Augwind Energy
Assuming the 90 days trading horizon Clal Biotechnology Industries is expected to under-perform the Augwind Energy. But the stock apears to be less risky and, when comparing its historical volatility, Clal Biotechnology Industries is 1.65 times less risky than Augwind Energy. The stock trades about -0.01 of its potential returns per unit of risk. The Augwind Energy Tech is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 47,640 in Augwind Energy Tech on September 3, 2024 and sell it today you would earn a total of 15,970 from holding Augwind Energy Tech or generate 33.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Biotechnology Industries vs. Augwind Energy Tech
Performance |
| Timeline |
| Clal Biotechnology |
| Augwind Energy Tech |
Clal Biotechnology and Augwind Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Biotechnology and Augwind Energy
The main advantage of trading using opposite Clal Biotechnology and Augwind Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Biotechnology position performs unexpectedly, Augwind Energy 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 Augwind Energy will offset losses from the drop in Augwind Energy's long position.| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. BioLine RX | Clal Biotechnology vs. Evogene | Clal Biotechnology vs. Bezeq Israeli Telecommunication |
| Augwind Energy vs. Aquarius Engines AM | Augwind Energy vs. Highcon Systems | Augwind Energy vs. Brainsway | Augwind Energy vs. Mivne Real Estate |
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 Stocks Directory module to find actively traded stocks across global markets.
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