Correlation Between Clal Insurance and Value Capital
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Value Capital 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 Value Capital 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 Value Capital One, you can compare the effects of market volatilities on Clal Insurance and Value Capital 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 Value Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Value Capital.
Diversification Opportunities for Clal Insurance and Value Capital
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clal and Value is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Value Capital One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Capital One 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 Value Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Capital One has no effect on the direction of Clal Insurance i.e., Clal Insurance and Value Capital go up and down completely randomly.
Pair Corralation between Clal Insurance and Value Capital
Assuming the 90 days trading horizon Clal Insurance Enterprises is expected to generate 0.28 times more return on investment than Value Capital. However, Clal Insurance Enterprises is 3.63 times less risky than Value Capital. It trades about 0.29 of its potential returns per unit of risk. Value Capital One is currently generating about 0.05 per unit of risk. If you would invest 556,743 in Clal Insurance Enterprises on November 3, 2024 and sell it today you would earn a total of 380,257 from holding Clal Insurance Enterprises or generate 68.3% 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. Value Capital One
Performance |
| Timeline |
| Clal Insurance Enter |
| Value Capital One |
Clal Insurance and Value Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and Value Capital
The main advantage of trading using opposite Clal Insurance and Value Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, Value Capital 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 Value Capital will offset losses from the drop in Value Capital's long position.| Clal Insurance vs. Migdal Insurance | Clal Insurance vs. Harel Insurance Investments | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. Bank Hapoalim |
| Value Capital vs. Willy Food | Value Capital vs. Propert Buil | Value Capital vs. Rekah Pharmaceutical Industry | Value Capital 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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