Correlation Between Clal Biotechnology and Global Knafaim
Can any of the company-specific risk be diversified away by investing in both Clal Biotechnology and Global Knafaim 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 Global Knafaim 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 Global Knafaim Leasing, you can compare the effects of market volatilities on Clal Biotechnology and Global Knafaim 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 Global Knafaim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Biotechnology and Global Knafaim.
Diversification Opportunities for Clal Biotechnology and Global Knafaim
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clal and Global is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Clal Biotechnology Industries and Global Knafaim Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Knafaim Leasing 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 Global Knafaim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Knafaim Leasing has no effect on the direction of Clal Biotechnology i.e., Clal Biotechnology and Global Knafaim go up and down completely randomly.
Pair Corralation between Clal Biotechnology and Global Knafaim
Assuming the 90 days trading horizon Clal Biotechnology Industries is expected to under-perform the Global Knafaim. In addition to that, Clal Biotechnology is 1.88 times more volatile than Global Knafaim Leasing. It trades about -0.01 of its total potential returns per unit of risk. Global Knafaim Leasing is currently generating about 0.04 per unit of volatility. If you would invest 5,372 in Global Knafaim Leasing on August 27, 2024 and sell it today you would earn a total of 1,848 from holding Global Knafaim Leasing or generate 34.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Biotechnology Industries vs. Global Knafaim Leasing
Performance |
| Timeline |
| Clal Biotechnology |
| Global Knafaim Leasing |
Clal Biotechnology and Global Knafaim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Biotechnology and Global Knafaim
The main advantage of trading using opposite Clal Biotechnology and Global Knafaim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Biotechnology position performs unexpectedly, Global Knafaim 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 Global Knafaim will offset losses from the drop in Global Knafaim's long position.| Clal Biotechnology vs. Netz Hotels | Clal Biotechnology vs. Migdal Insurance | Clal Biotechnology vs. Harel Insurance Investments | Clal Biotechnology vs. Menora Miv Hld |
| Global Knafaim vs. Arad | Global Knafaim vs. Alony Hetz Properties | Global Knafaim vs. Danel | Global Knafaim vs. Airport City |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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