Correlation Between Clal Insurance and MEITAV INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and MEITAV INVESTMENTS 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 MEITAV INVESTMENTS 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 MEITAV INVESTMENTS HOUSE, you can compare the effects of market volatilities on Clal Insurance and MEITAV INVESTMENTS 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 MEITAV INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and MEITAV INVESTMENTS.
Diversification Opportunities for Clal Insurance and MEITAV INVESTMENTS
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Clal and MEITAV is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and MEITAV INVESTMENTS HOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEITAV INVESTMENTS HOUSE 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 MEITAV INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEITAV INVESTMENTS HOUSE has no effect on the direction of Clal Insurance i.e., Clal Insurance and MEITAV INVESTMENTS go up and down completely randomly.
Pair Corralation between Clal Insurance and MEITAV INVESTMENTS
Assuming the 90 days trading horizon Clal Insurance is expected to generate 4.11 times less return on investment than MEITAV INVESTMENTS. But when comparing it to its historical volatility, Clal Insurance Enterprises is 1.92 times less risky than MEITAV INVESTMENTS. It trades about 0.25 of its potential returns per unit of risk. MEITAV INVESTMENTS HOUSE is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest 199,600 in MEITAV INVESTMENTS HOUSE on September 1, 2024 and sell it today you would earn a total of 69,500 from holding MEITAV INVESTMENTS HOUSE or generate 34.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Insurance Enterprises vs. MEITAV INVESTMENTS HOUSE
Performance |
| Timeline |
| Clal Insurance Enter |
| MEITAV INVESTMENTS HOUSE |
Clal Insurance and MEITAV INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and MEITAV INVESTMENTS
The main advantage of trading using opposite Clal Insurance and MEITAV INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, MEITAV INVESTMENTS 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 MEITAV INVESTMENTS will offset losses from the drop in MEITAV INVESTMENTS's long position.| Clal Insurance vs. Menif Financial Services | Clal Insurance vs. Accel Solutions Group | Clal Insurance vs. Rani Zim Shopping | Clal Insurance vs. Mivtach Shamir |
| MEITAV INVESTMENTS vs. Nice | MEITAV INVESTMENTS vs. The Gold Bond | MEITAV INVESTMENTS vs. Bank Leumi Le Israel | MEITAV INVESTMENTS vs. ICL Israel Chemicals |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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