Correlation Between Clal Insurance and Nawi Brothers
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Nawi Brothers 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 Nawi Brothers 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 Nawi Brothers Group, you can compare the effects of market volatilities on Clal Insurance and Nawi Brothers 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 Nawi Brothers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Nawi Brothers.
Diversification Opportunities for Clal Insurance and Nawi Brothers
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clal and Nawi is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Nawi Brothers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nawi Brothers Group 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 Nawi Brothers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nawi Brothers Group has no effect on the direction of Clal Insurance i.e., Clal Insurance and Nawi Brothers go up and down completely randomly.
Pair Corralation between Clal Insurance and Nawi Brothers
Assuming the 90 days trading horizon Clal Insurance Enterprises is expected to generate 0.98 times more return on investment than Nawi Brothers. However, Clal Insurance Enterprises is 1.02 times less risky than Nawi Brothers. It trades about 0.25 of its potential returns per unit of risk. Nawi Brothers Group is currently generating about 0.22 per unit of risk. If you would invest 717,000 in Clal Insurance Enterprises on September 1, 2024 and sell it today you would earn a total of 54,200 from holding Clal Insurance Enterprises or generate 7.56% 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. Nawi Brothers Group
Performance |
| Timeline |
| Clal Insurance Enter |
| Nawi Brothers Group |
Clal Insurance and Nawi Brothers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and Nawi Brothers
The main advantage of trading using opposite Clal Insurance and Nawi Brothers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, Nawi Brothers 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 Nawi Brothers will offset losses from the drop in Nawi Brothers' 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 |
| Nawi Brothers vs. Menif Financial Services | Nawi Brothers vs. Accel Solutions Group | Nawi Brothers vs. Rani Zim Shopping | Nawi Brothers vs. Mivtach Shamir |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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