Correlation Between Clal Biotechnology and Harel Insurance
Can any of the company-specific risk be diversified away by investing in both Clal Biotechnology and Harel Insurance 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 Harel Insurance 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 Harel Insurance Investments, you can compare the effects of market volatilities on Clal Biotechnology and Harel Insurance 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 Harel Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Biotechnology and Harel Insurance.
Diversification Opportunities for Clal Biotechnology and Harel Insurance
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clal and Harel is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Clal Biotechnology Industries and Harel Insurance Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harel Insurance Inve 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 Harel Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harel Insurance Inve has no effect on the direction of Clal Biotechnology i.e., Clal Biotechnology and Harel Insurance go up and down completely randomly.
Pair Corralation between Clal Biotechnology and Harel Insurance
Assuming the 90 days trading horizon Clal Biotechnology Industries is expected to under-perform the Harel Insurance. In addition to that, Clal Biotechnology is 1.25 times more volatile than Harel Insurance Investments. It trades about -0.19 of its total potential returns per unit of risk. Harel Insurance Investments is currently generating about 0.51 per unit of volatility. If you would invest 374,000 in Harel Insurance Investments on August 30, 2024 and sell it today you would earn a total of 64,000 from holding Harel Insurance Investments or generate 17.11% 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. Harel Insurance Investments
Performance |
| Timeline |
| Clal Biotechnology |
| Harel Insurance Inve |
Clal Biotechnology and Harel Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Biotechnology and Harel Insurance
The main advantage of trading using opposite Clal Biotechnology and Harel Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Biotechnology position performs unexpectedly, Harel Insurance 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 Harel Insurance will offset losses from the drop in Harel Insurance's long position.| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. Bezeq Israeli Telecommunication | Clal Biotechnology vs. B Communications | Clal Biotechnology vs. Petrochemical |
| Harel Insurance vs. Elbit Systems | Harel Insurance vs. Discount Investment Corp | Harel Insurance vs. AudioCodes | Harel Insurance vs. Shufersal |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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