Correlation Between Clal Insurance and Israel Opportunity
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Israel Opportunity 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 Israel Opportunity 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 Israel Opportunity , you can compare the effects of market volatilities on Clal Insurance and Israel Opportunity 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 Israel Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Israel Opportunity.
Diversification Opportunities for Clal Insurance and Israel Opportunity
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clal and Israel is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Israel Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Opportunity 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 Israel Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Opportunity has no effect on the direction of Clal Insurance i.e., Clal Insurance and Israel Opportunity go up and down completely randomly.
Pair Corralation between Clal Insurance and Israel Opportunity
Assuming the 90 days trading horizon Clal Insurance Enterprises is expected to generate 0.7 times more return on investment than Israel Opportunity. However, Clal Insurance Enterprises is 1.43 times less risky than Israel Opportunity. It trades about 0.31 of its potential returns per unit of risk. Israel Opportunity is currently generating about -0.02 per unit of risk. If you would invest 590,000 in Clal Insurance Enterprises on August 29, 2024 and sell it today you would earn a total of 176,900 from holding Clal Insurance Enterprises or generate 29.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Insurance Enterprises vs. Israel Opportunity
Performance |
| Timeline |
| Clal Insurance Enter |
| Israel Opportunity |
Clal Insurance and Israel Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and Israel Opportunity
The main advantage of trading using opposite Clal Insurance and Israel Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, Israel Opportunity 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 Israel Opportunity will offset losses from the drop in Israel Opportunity's long position.| Clal Insurance vs. Elbit Systems | Clal Insurance vs. Discount Investment Corp | Clal Insurance vs. AudioCodes | Clal Insurance vs. Shufersal |
| Israel Opportunity vs. Lapidoth | Israel Opportunity vs. Ilex Medical | Israel Opportunity vs. Aerodrome Group | Israel Opportunity vs. Opal Balance |
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.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |