Correlation Between Clal Insurance and Netanel
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Netanel 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 Netanel 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 Netanel Group, you can compare the effects of market volatilities on Clal Insurance and Netanel 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 Netanel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Netanel.
Diversification Opportunities for Clal Insurance and Netanel
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clal and Netanel is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Netanel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netanel 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 Netanel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netanel Group has no effect on the direction of Clal Insurance i.e., Clal Insurance and Netanel go up and down completely randomly.
Pair Corralation between Clal Insurance and Netanel
Assuming the 90 days trading horizon Clal Insurance is expected to generate 1.27 times less return on investment than Netanel. But when comparing it to its historical volatility, Clal Insurance Enterprises is 1.08 times less risky than Netanel. It trades about 0.1 of its potential returns per unit of risk. Netanel Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 85,300 in Netanel Group on September 4, 2024 and sell it today you would earn a total of 45,700 from holding Netanel Group or generate 53.58% 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. Netanel Group
Performance |
| Timeline |
| Clal Insurance Enter |
| Netanel Group |
Clal Insurance and Netanel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and Netanel
The main advantage of trading using opposite Clal Insurance and Netanel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, Netanel 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 Netanel will offset losses from the drop in Netanel's long position.| Clal Insurance vs. Bank Hapoalim | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. First International Bank | Clal Insurance vs. Elbit Systems |
| Netanel vs. EN Shoham Business | Netanel vs. Rani Zim Shopping | Netanel vs. Accel Solutions Group | Netanel 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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