Correlation Between Clal Insurance and FMS Enterprises
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and FMS Enterprises 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 FMS Enterprises 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 FMS Enterprises Migun, you can compare the effects of market volatilities on Clal Insurance and FMS Enterprises 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 FMS Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and FMS Enterprises.
Diversification Opportunities for Clal Insurance and FMS Enterprises
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clal and FMS is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and FMS Enterprises Migun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FMS Enterprises Migun 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 FMS Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FMS Enterprises Migun has no effect on the direction of Clal Insurance i.e., Clal Insurance and FMS Enterprises go up and down completely randomly.
Pair Corralation between Clal Insurance and FMS Enterprises
Assuming the 90 days trading horizon Clal Insurance Enterprises is expected to generate 1.33 times more return on investment than FMS Enterprises. However, Clal Insurance is 1.33 times more volatile than FMS Enterprises Migun. It trades about 0.45 of its potential returns per unit of risk. FMS Enterprises Migun is currently generating about 0.25 per unit of risk. If you would invest 847,000 in Clal Insurance Enterprises on October 21, 2024 and sell it today you would earn a total of 114,300 from holding Clal Insurance Enterprises or generate 13.49% 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. FMS Enterprises Migun
Performance |
| Timeline |
| Clal Insurance Enter |
| FMS Enterprises Migun |
Clal Insurance and FMS Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and FMS Enterprises
The main advantage of trading using opposite Clal Insurance and FMS Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, FMS Enterprises 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 FMS Enterprises will offset losses from the drop in FMS Enterprises' long position.| Clal Insurance vs. Migdal Insurance | Clal Insurance vs. Harel Insurance Investments | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. Bank Hapoalim |
| FMS Enterprises vs. Overseas Commerce | FMS Enterprises vs. The Gold Bond | FMS Enterprises vs. Bio Meat Foodtech | FMS Enterprises vs. Infimer |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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