Correlation Between Clal Biotechnology and Compugen
Can any of the company-specific risk be diversified away by investing in both Clal Biotechnology and Compugen 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 Compugen 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 Compugen, you can compare the effects of market volatilities on Clal Biotechnology and Compugen 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 Compugen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Biotechnology and Compugen.
Diversification Opportunities for Clal Biotechnology and Compugen
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clal and Compugen is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Clal Biotechnology Industries and Compugen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugen 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 Compugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugen has no effect on the direction of Clal Biotechnology i.e., Clal Biotechnology and Compugen go up and down completely randomly.
Pair Corralation between Clal Biotechnology and Compugen
Assuming the 90 days trading horizon Clal Biotechnology is expected to generate 15.95 times less return on investment than Compugen. But when comparing it to its historical volatility, Clal Biotechnology Industries is 2.5 times less risky than Compugen. It trades about 0.01 of its potential returns per unit of risk. Compugen is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 30,340 in Compugen on September 4, 2024 and sell it today you would earn a total of 25,020 from holding Compugen or generate 82.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Biotechnology Industries vs. Compugen
Performance |
| Timeline |
| Clal Biotechnology |
| Compugen |
Clal Biotechnology and Compugen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Biotechnology and Compugen
The main advantage of trading using opposite Clal Biotechnology and Compugen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Biotechnology position performs unexpectedly, Compugen 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 Compugen will offset losses from the drop in Compugen's long position.| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. BioLine RX | Clal Biotechnology vs. Evogene | Clal Biotechnology vs. Bezeq Israeli Telecommunication |
| Compugen vs. Purple Biotech | Compugen vs. BioLine RX | Compugen vs. Clal Biotechnology Industries | Compugen vs. Evogene |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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