Correlation Between Clal Insurance and Abra Information
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Abra Information 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 Insurance and Abra Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clal Insurance Enterprises and Abra Information Technologies, you can compare the effects of market volatilities on Clal Insurance and Abra Information 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 Insurance with a short position of Abra Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Abra Information.
Diversification Opportunities for Clal Insurance and Abra Information
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clal and Abra is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Abra Information Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abra Information Tec and Clal Insurance 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 Insurance Enterprises are associated (or correlated) with Abra Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abra Information Tec has no effect on the direction of Clal Insurance i.e., Clal Insurance and Abra Information go up and down completely randomly.
Pair Corralation between Clal Insurance and Abra Information
Assuming the 90 days trading horizon Clal Insurance Enterprises is expected to generate 1.04 times more return on investment than Abra Information. However, Clal Insurance is 1.04 times more volatile than Abra Information Technologies. It trades about 0.42 of its potential returns per unit of risk. Abra Information Technologies is currently generating about -0.49 per unit of risk. If you would invest 648,500 in Clal Insurance Enterprises on August 25, 2024 and sell it today you would earn a total of 101,500 from holding Clal Insurance Enterprises or generate 15.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Insurance Enterprises vs. Abra Information Technologies
Performance |
| Timeline |
| Clal Insurance Enter |
| Abra Information Tec |
Clal Insurance and Abra Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and Abra Information
The main advantage of trading using opposite Clal Insurance and Abra Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, Abra Information 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 Abra Information will offset losses from the drop in Abra Information's long position.| Clal Insurance vs. Migdal Insurance | Clal Insurance vs. Harel Insurance Investments | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. Bank Hapoalim |
| Abra Information vs. Scope Metals Group | Abra Information vs. Menif Financial Services | Abra Information vs. Unet Credit Finance | Abra Information vs. Clal Insurance Enterprises |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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