Correlation Between Clal Biotechnology and Multi Retail
Can any of the company-specific risk be diversified away by investing in both Clal Biotechnology and Multi Retail 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 Multi Retail 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 Multi Retail Group, you can compare the effects of market volatilities on Clal Biotechnology and Multi Retail 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 Multi Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Biotechnology and Multi Retail.
Diversification Opportunities for Clal Biotechnology and Multi Retail
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clal and Multi is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Clal Biotechnology Industries and Multi Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Retail Group 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 Multi Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Retail Group has no effect on the direction of Clal Biotechnology i.e., Clal Biotechnology and Multi Retail go up and down completely randomly.
Pair Corralation between Clal Biotechnology and Multi Retail
Assuming the 90 days trading horizon Clal Biotechnology is expected to generate 1.59 times less return on investment than Multi Retail. In addition to that, Clal Biotechnology is 1.06 times more volatile than Multi Retail Group. It trades about 0.22 of its total potential returns per unit of risk. Multi Retail Group is currently generating about 0.37 per unit of volatility. If you would invest 113,900 in Multi Retail Group on October 24, 2024 and sell it today you would earn a total of 15,600 from holding Multi Retail Group or generate 13.7% 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. Multi Retail Group
Performance |
| Timeline |
| Clal Biotechnology |
| Multi Retail Group |
Clal Biotechnology and Multi Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Biotechnology and Multi Retail
The main advantage of trading using opposite Clal Biotechnology and Multi Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Biotechnology position performs unexpectedly, Multi Retail 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 Multi Retail will offset losses from the drop in Multi Retail's long position.| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. BioLine RX | Clal Biotechnology vs. Evogene | Clal Biotechnology vs. Bezeq Israeli Telecommunication |
| Multi Retail vs. Isras Investment | Multi Retail vs. Oron Group Investments | Multi Retail vs. Altshuler Shaham Financial | Multi Retail vs. Arad Investment Industrial |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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