Correlation Between Clal Insurance and AudioCodes
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and AudioCodes 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 AudioCodes 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 AudioCodes, you can compare the effects of market volatilities on Clal Insurance and AudioCodes 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 AudioCodes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and AudioCodes.
Diversification Opportunities for Clal Insurance and AudioCodes
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Clal and AudioCodes is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and AudioCodes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioCodes 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 AudioCodes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AudioCodes has no effect on the direction of Clal Insurance i.e., Clal Insurance and AudioCodes go up and down completely randomly.
Pair Corralation between Clal Insurance and AudioCodes
Assuming the 90 days trading horizon Clal Insurance Enterprises is expected to generate 0.5 times more return on investment than AudioCodes. However, Clal Insurance Enterprises is 2.0 times less risky than AudioCodes. It trades about 0.25 of its potential returns per unit of risk. AudioCodes is currently generating about -0.08 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Insurance Enterprises vs. AudioCodes
Performance |
| Timeline |
| Clal Insurance Enter |
| AudioCodes |
Clal Insurance and AudioCodes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and AudioCodes
The main advantage of trading using opposite Clal Insurance and AudioCodes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, AudioCodes 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 AudioCodes will offset losses from the drop in AudioCodes' 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 |
| AudioCodes vs. Nice | AudioCodes vs. Tower Semiconductor | AudioCodes vs. Elbit Systems | AudioCodes vs. Nova |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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