Correlation Between Clal Insurance and Scope Metals
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Scope Metals 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 Scope Metals 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 Scope Metals Group, you can compare the effects of market volatilities on Clal Insurance and Scope Metals 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 Scope Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Scope Metals.
Diversification Opportunities for Clal Insurance and Scope Metals
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clal and Scope is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Scope Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scope Metals 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 Scope Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scope Metals Group has no effect on the direction of Clal Insurance i.e., Clal Insurance and Scope Metals go up and down completely randomly.
Pair Corralation between Clal Insurance and Scope Metals
Assuming the 90 days trading horizon Clal Insurance Enterprises is expected to generate 0.91 times more return on investment than Scope Metals. However, Clal Insurance Enterprises is 1.1 times less risky than Scope Metals. It trades about 0.14 of its potential returns per unit of risk. Scope Metals Group is currently generating about 0.08 per unit of risk. If you would invest 604,500 in Clal Insurance Enterprises on August 31, 2024 and sell it today you would earn a total of 166,700 from holding Clal Insurance Enterprises or generate 27.58% 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. Scope Metals Group
Performance |
| Timeline |
| Clal Insurance Enter |
| Scope Metals Group |
Clal Insurance and Scope Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and Scope Metals
The main advantage of trading using opposite Clal Insurance and Scope Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, Scope Metals 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 Scope Metals will offset losses from the drop in Scope Metals' long position.| Clal Insurance vs. Migdal Insurance | Clal Insurance vs. Harel Insurance Investments | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. Bank Hapoalim |
| Scope Metals vs. Delek Automotive Systems | Scope Metals vs. Kerur Holdings | Scope Metals vs. Neto ME Holdings | Scope Metals vs. Bank Leumi Le Israel |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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