Correlation Between Clal Insurance and Arad
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Arad 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 Arad 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 Arad, you can compare the effects of market volatilities on Clal Insurance and Arad 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 Arad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Arad.
Diversification Opportunities for Clal Insurance and Arad
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Clal and Arad is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Arad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arad 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 Arad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arad has no effect on the direction of Clal Insurance i.e., Clal Insurance and Arad go up and down completely randomly.
Pair Corralation between Clal Insurance and Arad
Assuming the 90 days trading horizon Clal Insurance Enterprises is expected to generate 0.89 times more return on investment than Arad. However, Clal Insurance Enterprises is 1.12 times less risky than Arad. It trades about 0.25 of its potential returns per unit of risk. Arad is currently generating about -0.1 per unit of risk. If you would invest 717,000 in Clal Insurance Enterprises on September 1, 2024 and sell it today you would earn a total of 54,200 from holding Clal Insurance Enterprises or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Insurance Enterprises vs. Arad
Performance |
| Timeline |
| Clal Insurance Enter |
| Arad |
Clal Insurance and Arad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and Arad
The main advantage of trading using opposite Clal Insurance and Arad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, Arad 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 Arad will offset losses from the drop in Arad's long position.| Clal Insurance vs. Menif Financial Services | Clal Insurance vs. Accel Solutions Group | Clal Insurance vs. Rani Zim Shopping | Clal Insurance vs. Mivtach Shamir |
| Arad vs. Amanet Management Systems | Arad vs. Dan Hotels | Arad vs. Scope Metals Group | Arad vs. Sofwave Medical |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |