Correlation Between Clal Insurance and Danel
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Danel 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 Danel 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 Danel, you can compare the effects of market volatilities on Clal Insurance and Danel 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 Danel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Danel.
Diversification Opportunities for Clal Insurance and Danel
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clal and Danel is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Danel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danel 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 Danel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danel has no effect on the direction of Clal Insurance i.e., Clal Insurance and Danel go up and down completely randomly.
Pair Corralation between Clal Insurance and Danel
Assuming the 90 days trading horizon Clal Insurance Enterprises is expected to generate 1.28 times more return on investment than Danel. However, Clal Insurance is 1.28 times more volatile than Danel. It trades about 0.47 of its potential returns per unit of risk. Danel is currently generating about 0.51 per unit of risk. If you would invest 648,500 in Clal Insurance Enterprises on August 28, 2024 and sell it today you would earn a total of 118,400 from holding Clal Insurance Enterprises or generate 18.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Insurance Enterprises vs. Danel
Performance |
| Timeline |
| Clal Insurance Enter |
| Danel |
Clal Insurance and Danel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and Danel
The main advantage of trading using opposite Clal Insurance and Danel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, Danel 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 Danel will offset losses from the drop in Danel's long position.| Clal Insurance vs. Bank Hapoalim | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. Bezeq Israeli Telecommunication | Clal Insurance vs. Elbit Systems |
| Danel vs. Hilan | Danel vs. Fattal 1998 Holdings | Danel vs. Matrix | Danel vs. Bezeq Israeli Telecommunication |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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