Correlation Between Clal Biotechnology and Nova
Can any of the company-specific risk be diversified away by investing in both Clal Biotechnology and Nova 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 Nova 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 Nova, you can compare the effects of market volatilities on Clal Biotechnology and Nova 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 Nova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Biotechnology and Nova.
Diversification Opportunities for Clal Biotechnology and Nova
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clal and Nova is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Clal Biotechnology Industries and Nova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova 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 Nova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova has no effect on the direction of Clal Biotechnology i.e., Clal Biotechnology and Nova go up and down completely randomly.
Pair Corralation between Clal Biotechnology and Nova
Assuming the 90 days trading horizon Clal Biotechnology Industries is expected to under-perform the Nova. In addition to that, Clal Biotechnology is 1.37 times more volatile than Nova. It trades about -0.01 of its total potential returns per unit of risk. Nova is currently generating about 0.11 per unit of volatility. If you would invest 3,460,000 in Nova on November 27, 2024 and sell it today you would earn a total of 5,938,000 from holding Nova or generate 171.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Biotechnology Industries vs. Nova
Performance |
| Timeline |
| Clal Biotechnology |
| Nova |
Clal Biotechnology and Nova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Biotechnology and Nova
The main advantage of trading using opposite Clal Biotechnology and Nova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Biotechnology position performs unexpectedly, Nova 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 Nova will offset losses from the drop in Nova's long position.| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. BioLine RX | Clal Biotechnology vs. Evogene | Clal Biotechnology vs. Bezeq Israeli Telecommunication |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |