Correlation Between Clal Biotechnology and Terminal X
Can any of the company-specific risk be diversified away by investing in both Clal Biotechnology and Terminal X 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 Terminal X 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 Terminal X Online, you can compare the effects of market volatilities on Clal Biotechnology and Terminal X 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 Terminal X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Biotechnology and Terminal X.
Diversification Opportunities for Clal Biotechnology and Terminal X
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clal and Terminal is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Clal Biotechnology Industries and Terminal X Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terminal X Online 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 Terminal X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terminal X Online has no effect on the direction of Clal Biotechnology i.e., Clal Biotechnology and Terminal X go up and down completely randomly.
Pair Corralation between Clal Biotechnology and Terminal X
Assuming the 90 days trading horizon Clal Biotechnology Industries is expected to under-perform the Terminal X. In addition to that, Clal Biotechnology is 1.07 times more volatile than Terminal X Online. It trades about -0.05 of its total potential returns per unit of risk. Terminal X Online is currently generating about 0.36 per unit of volatility. If you would invest 38,740 in Terminal X Online on September 1, 2024 and sell it today you would earn a total of 4,580 from holding Terminal X Online or generate 11.82% 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. Terminal X Online
Performance |
| Timeline |
| Clal Biotechnology |
| Terminal X Online |
Clal Biotechnology and Terminal X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Biotechnology and Terminal X
The main advantage of trading using opposite Clal Biotechnology and Terminal X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Biotechnology position performs unexpectedly, Terminal X 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 Terminal X will offset losses from the drop in Terminal X's long position.| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. Bezeq Israeli Telecommunication | Clal Biotechnology vs. Brainsway | Clal Biotechnology vs. Mivne Real Estate |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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