Correlation Between Clal Insurance and Electra Co
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Electra Co 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 Electra Co 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 Electra Co Pr, you can compare the effects of market volatilities on Clal Insurance and Electra Co 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 Electra Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Electra Co.
Diversification Opportunities for Clal Insurance and Electra Co
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clal and Electra is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Electra Co Pr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electra Co Pr 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 Electra Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electra Co Pr has no effect on the direction of Clal Insurance i.e., Clal Insurance and Electra Co go up and down completely randomly.
Pair Corralation between Clal Insurance and Electra Co
Assuming the 90 days trading horizon Clal Insurance is expected to generate 2.97 times less return on investment than Electra Co. But when comparing it to its historical volatility, Clal Insurance Enterprises is 2.36 times less risky than Electra Co. It trades about 0.25 of its potential returns per unit of risk. Electra Co Pr is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 749,100 in Electra Co Pr on September 1, 2024 and sell it today you would earn a total of 175,300 from holding Electra Co Pr or generate 23.4% 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. Electra Co Pr
Performance |
| Timeline |
| Clal Insurance Enter |
| Electra Co Pr |
Clal Insurance and Electra Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and Electra Co
The main advantage of trading using opposite Clal Insurance and Electra Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, Electra Co 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 Electra Co will offset losses from the drop in Electra Co's long position.| Clal Insurance vs. Menif Financial Services | Clal Insurance vs. Accel Solutions Group | Clal Insurance vs. Rani Zim Shopping | Clal Insurance vs. Rapac Communication Infrastructure |
| Electra Co vs. El Al Israel | Electra Co vs. Magic Software Enterprises | Electra Co vs. Neto Malinda | Electra Co vs. Orbit Technologies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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