Correlation Between Clal Insurance and Orbit Technologies
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Orbit Technologies 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 Orbit Technologies 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 Orbit Technologies, you can compare the effects of market volatilities on Clal Insurance and Orbit Technologies 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 Orbit Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Orbit Technologies.
Diversification Opportunities for Clal Insurance and Orbit Technologies
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clal and Orbit is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Orbit Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Technologies 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 Orbit Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Technologies has no effect on the direction of Clal Insurance i.e., Clal Insurance and Orbit Technologies go up and down completely randomly.
Pair Corralation between Clal Insurance and Orbit Technologies
Assuming the 90 days trading horizon Clal Insurance is expected to generate 1.06 times less return on investment than Orbit Technologies. In addition to that, Clal Insurance is 1.01 times more volatile than Orbit Technologies. It trades about 0.08 of its total potential returns per unit of risk. Orbit Technologies is currently generating about 0.09 per unit of volatility. If you would invest 157,188 in Orbit Technologies on November 21, 2024 and sell it today you would earn a total of 158,412 from holding Orbit Technologies or generate 100.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.74% |
| Values | Daily Returns |
Clal Insurance Enterprises vs. Orbit Technologies
Performance |
| Timeline |
| Clal Insurance Enter |
| Orbit Technologies |
Clal Insurance and Orbit Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and Orbit Technologies
The main advantage of trading using opposite Clal Insurance and Orbit Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, Orbit Technologies 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 Orbit Technologies will offset losses from the drop in Orbit Technologies' long position.| Clal Insurance vs. Migdal Insurance | Clal Insurance vs. Harel Insurance Investments | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. Bank Hapoalim |
| Orbit Technologies vs. Elbit Systems | Orbit Technologies vs. Bet Shemesh Engines | Orbit Technologies vs. Maytronics | Orbit Technologies vs. Bezeq Israeli Telecommunication |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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