Correlation Between Clal Insurance and Satcom Systems
Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Satcom Systems 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 Satcom Systems 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 Satcom Systems, you can compare the effects of market volatilities on Clal Insurance and Satcom Systems 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 Satcom Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Satcom Systems.
Diversification Opportunities for Clal Insurance and Satcom Systems
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Clal and Satcom is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Satcom Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satcom Systems 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 Satcom Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satcom Systems has no effect on the direction of Clal Insurance i.e., Clal Insurance and Satcom Systems go up and down completely randomly.
Pair Corralation between Clal Insurance and Satcom Systems
Assuming the 90 days trading horizon Clal Insurance Enterprises is expected to generate 0.64 times more return on investment than Satcom Systems. However, Clal Insurance Enterprises is 1.56 times less risky than Satcom Systems. It trades about 0.37 of its potential returns per unit of risk. Satcom Systems is currently generating about 0.03 per unit of risk. If you would invest 727,647 in Clal Insurance Enterprises on September 13, 2024 and sell it today you would earn a total of 104,217 from holding Clal Insurance Enterprises or generate 14.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clal Insurance Enterprises vs. Satcom Systems
Performance |
| Timeline |
| Clal Insurance Enter |
| Satcom Systems |
Clal Insurance and Satcom Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clal Insurance and Satcom Systems
The main advantage of trading using opposite Clal Insurance and Satcom Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, Satcom Systems 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 Satcom Systems will offset losses from the drop in Satcom Systems' long position.| Clal Insurance vs. Bank Hapoalim | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. Mizrahi Tefahot | Clal Insurance vs. Bezeq Israeli Telecommunication |
| Satcom Systems vs. Amanet Management Systems | Satcom Systems vs. Teuza A Fairchild | Satcom Systems vs. MEITAV INVESTMENTS HOUSE | Satcom Systems vs. Hiron Trade Investments Industrial |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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