Correlation Between Dan Hotels and Clal Biotechnology
Can any of the company-specific risk be diversified away by investing in both Dan Hotels and Clal Biotechnology 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 Dan Hotels and Clal Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dan Hotels and Clal Biotechnology Industries, you can compare the effects of market volatilities on Dan Hotels and Clal Biotechnology 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 Dan Hotels with a short position of Clal Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dan Hotels and Clal Biotechnology.
Diversification Opportunities for Dan Hotels and Clal Biotechnology
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dan and Clal is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dan Hotels and Clal Biotechnology Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Biotechnology and Dan Hotels 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 Dan Hotels are associated (or correlated) with Clal Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clal Biotechnology has no effect on the direction of Dan Hotels i.e., Dan Hotels and Clal Biotechnology go up and down completely randomly.
Pair Corralation between Dan Hotels and Clal Biotechnology
Assuming the 90 days trading horizon Dan Hotels is expected to generate 0.76 times more return on investment than Clal Biotechnology. However, Dan Hotels is 1.32 times less risky than Clal Biotechnology. It trades about 0.02 of its potential returns per unit of risk. Clal Biotechnology Industries is currently generating about -0.29 per unit of risk. If you would invest 231,800 in Dan Hotels on August 27, 2024 and sell it today you would earn a total of 600.00 from holding Dan Hotels or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dan Hotels vs. Clal Biotechnology Industries
Performance |
| Timeline |
| Dan Hotels |
| Clal Biotechnology |
Dan Hotels and Clal Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dan Hotels and Clal Biotechnology
The main advantage of trading using opposite Dan Hotels and Clal Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dan Hotels position performs unexpectedly, Clal Biotechnology 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 Clal Biotechnology will offset losses from the drop in Clal Biotechnology's long position.| Dan Hotels vs. Rimon Consulting Management | Dan Hotels vs. IDI Insurance | Dan Hotels vs. Victory Supermarket Chain | Dan Hotels vs. Migdal Insurance |
| Clal Biotechnology vs. Netz Hotels | Clal Biotechnology vs. Migdal Insurance | Clal Biotechnology vs. Harel Insurance Investments | Clal Biotechnology vs. Menora Miv Hld |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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