Correlation Between Clal Biotechnology and Phinergy
Can any of the company-specific risk be diversified away by investing in both Clal Biotechnology and Phinergy 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 Phinergy 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 Phinergy, you can compare the effects of market volatilities on Clal Biotechnology and Phinergy 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 Phinergy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Biotechnology and Phinergy.
Diversification Opportunities for Clal Biotechnology and Phinergy
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Clal and Phinergy is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Clal Biotechnology Industries and Phinergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phinergy 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 Phinergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phinergy has no effect on the direction of Clal Biotechnology i.e., Clal Biotechnology and Phinergy go up and down completely randomly.
Pair Corralation between Clal Biotechnology and Phinergy
Assuming the 90 days trading horizon Clal Biotechnology Industries is expected to generate 0.96 times more return on investment than Phinergy. However, Clal Biotechnology Industries is 1.04 times less risky than Phinergy. It trades about -0.01 of its potential returns per unit of risk. Phinergy is currently generating about -0.03 per unit of risk. If you would invest 4,700 in Clal Biotechnology Industries on September 14, 2024 and sell it today you would lose (1,180) from holding Clal Biotechnology Industries or give up 25.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Biotechnology Industries vs. Phinergy
Performance |
| Timeline |
| Clal Biotechnology |
| Phinergy |
Clal Biotechnology and Phinergy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Biotechnology and Phinergy
The main advantage of trading using opposite Clal Biotechnology and Phinergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Biotechnology position performs unexpectedly, Phinergy 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 Phinergy will offset losses from the drop in Phinergy's long position.| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. Bezeq Israeli Telecommunication | Clal Biotechnology vs. B Communications | Clal Biotechnology vs. Photomyne |
| Phinergy vs. Clal Biotechnology Industries | Phinergy vs. Storage Drop Storage | Phinergy vs. Wesure Global Tech | Phinergy vs. Petrochemical |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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