Correlation Between Israel Discount and Clal Insurance
Can any of the company-specific risk be diversified away by investing in both Israel Discount and Clal Insurance 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 Israel Discount and Clal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Discount Bank and Clal Insurance Enterprises, you can compare the effects of market volatilities on Israel Discount and Clal Insurance 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 Israel Discount with a short position of Clal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Clal Insurance.
Diversification Opportunities for Israel Discount and Clal Insurance
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Israel and Clal is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and Clal Insurance Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Insurance Enter and Israel Discount 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 Israel Discount Bank are associated (or correlated) with Clal Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clal Insurance Enter has no effect on the direction of Israel Discount i.e., Israel Discount and Clal Insurance go up and down completely randomly.
Pair Corralation between Israel Discount and Clal Insurance
Assuming the 90 days trading horizon Israel Discount Bank is expected to generate 0.85 times more return on investment than Clal Insurance. However, Israel Discount Bank is 1.18 times less risky than Clal Insurance. It trades about 0.06 of its potential returns per unit of risk. Clal Insurance Enterprises is currently generating about 0.03 per unit of risk. If you would invest 163,155 in Israel Discount Bank on August 27, 2024 and sell it today you would earn a total of 76,245 from holding Israel Discount Bank or generate 46.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Discount Bank vs. Clal Insurance Enterprises
Performance |
| Timeline |
| Israel Discount Bank |
| Clal Insurance Enter |
Israel Discount and Clal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and Clal Insurance
The main advantage of trading using opposite Israel Discount and Clal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, Clal Insurance 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 Insurance will offset losses from the drop in Clal Insurance's long position.| Israel Discount vs. Bank Leumi Le Israel | Israel Discount vs. Bank Hapoalim | Israel Discount vs. Mizrahi Tefahot | Israel Discount vs. Bezeq Israeli Telecommunication |
| Clal Insurance vs. Bank Hapoalim | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. Bezeq Israeli Telecommunication | Clal Insurance vs. Elbit Systems |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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