Correlation Between Clal Insurance and Avrot Industries
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Avrot Industries 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 Avrot Industries 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 Avrot Industries, you can compare the effects of market volatilities on Clal Insurance and Avrot Industries 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 Avrot Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Avrot Industries.
Diversification Opportunities for Clal Insurance and Avrot Industries
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Clal and Avrot is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Avrot Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avrot Industries 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 Avrot Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avrot Industries has no effect on the direction of Clal Insurance i.e., Clal Insurance and Avrot Industries go up and down completely randomly.
Pair Corralation between Clal Insurance and Avrot Industries
Assuming the 90 days trading horizon Clal Insurance Enterprises is expected to generate 0.75 times more return on investment than Avrot Industries. However, Clal Insurance Enterprises is 1.33 times less risky than Avrot Industries. It trades about 0.33 of its potential returns per unit of risk. Avrot Industries is currently generating about 0.04 per unit of risk. If you would invest 908,100 in Clal Insurance Enterprises on November 27, 2024 and sell it today you would earn a total of 84,200 from holding Clal Insurance Enterprises or generate 9.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Insurance Enterprises vs. Avrot Industries
Performance |
| Timeline |
| Clal Insurance Enter |
| Avrot Industries |
Clal Insurance and Avrot Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and Avrot Industries
The main advantage of trading using opposite Clal Insurance and Avrot Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, Avrot Industries 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 Avrot Industries will offset losses from the drop in Avrot Industries' long position.| Clal Insurance vs. Migdal Insurance | Clal Insurance vs. Harel Insurance Investments | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. Bank Hapoalim |
| Avrot Industries vs. Azorim Investment Development | Avrot Industries vs. Feat Fund Investments | Avrot Industries vs. Skyline Investments | Avrot Industries vs. IDI Insurance |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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