Correlation Between Clal Biotechnology and Orbit Technologies
Can any of the company-specific risk be diversified away by investing in both Clal Biotechnology and Orbit Technologies 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 Orbit Technologies 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 Orbit Technologies, you can compare the effects of market volatilities on Clal Biotechnology and Orbit Technologies 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 Orbit Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Biotechnology and Orbit Technologies.
Diversification Opportunities for Clal Biotechnology and Orbit Technologies
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clal and Orbit is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Clal Biotechnology Industries and Orbit Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Technologies 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 Orbit Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Technologies has no effect on the direction of Clal Biotechnology i.e., Clal Biotechnology and Orbit Technologies go up and down completely randomly.
Pair Corralation between Clal Biotechnology and Orbit Technologies
Assuming the 90 days trading horizon Clal Biotechnology Industries is expected to under-perform the Orbit Technologies. In addition to that, Clal Biotechnology is 1.58 times more volatile than Orbit Technologies. It trades about -0.02 of its total potential returns per unit of risk. Orbit Technologies is currently generating about 0.31 per unit of volatility. If you would invest 233,700 in Orbit Technologies on August 30, 2024 and sell it today you would earn a total of 41,800 from holding Orbit Technologies or generate 17.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Biotechnology Industries vs. Orbit Technologies
Performance |
| Timeline |
| Clal Biotechnology |
| Orbit Technologies |
Clal Biotechnology and Orbit Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Biotechnology and Orbit Technologies
The main advantage of trading using opposite Clal Biotechnology and Orbit Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Biotechnology position performs unexpectedly, Orbit Technologies 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 Orbit Technologies will offset losses from the drop in Orbit Technologies' long position.| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. Bezeq Israeli Telecommunication | Clal Biotechnology vs. B Communications | Clal Biotechnology vs. Petrochemical |
| Orbit Technologies vs. Ormat Technologies | Orbit Technologies vs. Multi Retail Group | Orbit Technologies vs. Nova | Orbit Technologies vs. B Communications |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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