Correlation Between Electra and Clal Insurance
Can any of the company-specific risk be diversified away by investing in both Electra 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 Electra and Clal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electra and Clal Insurance Enterprises, you can compare the effects of market volatilities on Electra 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 Electra with a short position of Clal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra and Clal Insurance.
Diversification Opportunities for Electra and Clal Insurance
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Electra and Clal is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Electra 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 Electra 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 Electra 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 Electra i.e., Electra and Clal Insurance go up and down completely randomly.
Pair Corralation between Electra and Clal Insurance
Assuming the 90 days trading horizon Electra is expected to generate 1.59 times less return on investment than Clal Insurance. In addition to that, Electra is 1.08 times more volatile than Clal Insurance Enterprises. It trades about 0.03 of its total potential returns per unit of risk. Clal Insurance Enterprises is currently generating about 0.06 per unit of volatility. If you would invest 569,800 in Clal Insurance Enterprises on September 2, 2024 and sell it today you would earn a total of 201,400 from holding Clal Insurance Enterprises or generate 35.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra vs. Clal Insurance Enterprises
Performance |
| Timeline |
| Electra |
| Clal Insurance Enter |
Electra and Clal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra and Clal Insurance
The main advantage of trading using opposite Electra and Clal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra 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.| Electra vs. Alony Hetz Properties | Electra vs. Melisron | Electra vs. Shufersal | Electra vs. Israel Discount Bank |
| Clal Insurance vs. Migdal Insurance | Clal Insurance vs. Harel Insurance Investments | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. Bank Hapoalim |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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