Correlation Between Clal Biotechnology and Bayside Land
Can any of the company-specific risk be diversified away by investing in both Clal Biotechnology and Bayside Land 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 Bayside Land 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 Bayside Land, you can compare the effects of market volatilities on Clal Biotechnology and Bayside Land 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 Bayside Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Biotechnology and Bayside Land.
Diversification Opportunities for Clal Biotechnology and Bayside Land
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clal and Bayside is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Clal Biotechnology Industries and Bayside Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayside Land 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 Bayside Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayside Land has no effect on the direction of Clal Biotechnology i.e., Clal Biotechnology and Bayside Land go up and down completely randomly.
Pair Corralation between Clal Biotechnology and Bayside Land
Assuming the 90 days trading horizon Clal Biotechnology Industries is expected to under-perform the Bayside Land. In addition to that, Clal Biotechnology is 1.56 times more volatile than Bayside Land. It trades about -0.06 of its total potential returns per unit of risk. Bayside Land is currently generating about -0.02 per unit of volatility. If you would invest 298,000 in Bayside Land on September 12, 2024 and sell it today you would lose (2,300) from holding Bayside Land or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Biotechnology Industries vs. Bayside Land
Performance |
| Timeline |
| Clal Biotechnology |
| Bayside Land |
Clal Biotechnology and Bayside Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Biotechnology and Bayside Land
The main advantage of trading using opposite Clal Biotechnology and Bayside Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Biotechnology position performs unexpectedly, Bayside Land 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 Bayside Land will offset losses from the drop in Bayside Land's long position.| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. Bezeq Israeli Telecommunication | Clal Biotechnology vs. B Communications | Clal Biotechnology vs. Photomyne |
| Bayside Land vs. Sure Tech Investments LP | Bayside Land vs. One Software Technologies | Bayside Land vs. Clal Biotechnology Industries | Bayside Land vs. Rapac Communication Infrastructure |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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