Correlation Between Clal Biotechnology and Creative Media
Can any of the company-specific risk be diversified away by investing in both Clal Biotechnology and Creative Media 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 Creative Media 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 Creative Media Community, you can compare the effects of market volatilities on Clal Biotechnology and Creative Media 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 Creative Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Biotechnology and Creative Media.
Diversification Opportunities for Clal Biotechnology and Creative Media
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Clal and Creative is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Clal Biotechnology Industries and Creative Media Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creative Media Community 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 Creative Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creative Media Community has no effect on the direction of Clal Biotechnology i.e., Clal Biotechnology and Creative Media go up and down completely randomly.
Pair Corralation between Clal Biotechnology and Creative Media
Assuming the 90 days trading horizon Clal Biotechnology is expected to generate 86.18 times less return on investment than Creative Media. But when comparing it to its historical volatility, Clal Biotechnology Industries is 107.32 times less risky than Creative Media. It trades about 0.29 of its potential returns per unit of risk. Creative Media Community is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 5,060 in Creative Media Community on October 22, 2024 and sell it today you would earn a total of 23,640 from holding Creative Media Community or generate 467.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Clal Biotechnology Industries vs. Creative Media Community
Performance |
| Timeline |
| Clal Biotechnology |
| Creative Media Community |
Clal Biotechnology and Creative Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Biotechnology and Creative Media
The main advantage of trading using opposite Clal Biotechnology and Creative Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Biotechnology position performs unexpectedly, Creative Media 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 Creative Media will offset losses from the drop in Creative Media's long position.| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. BioLine RX | Clal Biotechnology vs. Evogene | Clal Biotechnology vs. Bezeq Israeli Telecommunication |
| Creative Media vs. Imed Infinity Medical Limited | Creative Media vs. Menif Financial Services | Creative Media vs. Blender Financial Technologies | Creative Media vs. Migdal Insurance |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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