Correlation Between FIBI Holdings and Clal Insurance
Can any of the company-specific risk be diversified away by investing in both FIBI Holdings 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 FIBI Holdings and Clal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIBI Holdings and Clal Insurance Enterprises, you can compare the effects of market volatilities on FIBI Holdings 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 FIBI Holdings with a short position of Clal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIBI Holdings and Clal Insurance.
Diversification Opportunities for FIBI Holdings and Clal Insurance
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FIBI and Clal is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding FIBI Holdings 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 FIBI Holdings 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 FIBI Holdings 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 FIBI Holdings i.e., FIBI Holdings and Clal Insurance go up and down completely randomly.
Pair Corralation between FIBI Holdings and Clal Insurance
Assuming the 90 days trading horizon FIBI Holdings is expected to generate 0.76 times more return on investment than Clal Insurance. However, FIBI Holdings is 1.32 times less risky than Clal Insurance. It trades about 0.07 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 1,234,433 in FIBI Holdings on August 27, 2024 and sell it today you would earn a total of 559,567 from holding FIBI Holdings or generate 45.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIBI Holdings vs. Clal Insurance Enterprises
Performance |
| Timeline |
| FIBI Holdings |
| Clal Insurance Enter |
FIBI Holdings and Clal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIBI Holdings and Clal Insurance
The main advantage of trading using opposite FIBI Holdings and Clal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIBI Holdings 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.| FIBI Holdings vs. First International Bank | FIBI Holdings vs. Mizrahi Tefahot | FIBI Holdings vs. Israel Discount Bank | FIBI Holdings vs. Bank Leumi Le Israel |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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