Correlation Between Harel Insurance and Clal Biotechnology
Can any of the company-specific risk be diversified away by investing in both Harel Insurance 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 Harel Insurance and Clal Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harel Insurance Investments and Clal Biotechnology Industries, you can compare the effects of market volatilities on Harel Insurance 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 Harel Insurance with a short position of Clal Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and Clal Biotechnology.
Diversification Opportunities for Harel Insurance and Clal Biotechnology
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Harel and Clal is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and Clal Biotechnology Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Biotechnology and Harel 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 Harel Insurance Investments 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 Harel Insurance i.e., Harel Insurance and Clal Biotechnology go up and down completely randomly.
Pair Corralation between Harel Insurance and Clal Biotechnology
Assuming the 90 days trading horizon Harel Insurance Investments is expected to generate 0.88 times more return on investment than Clal Biotechnology. However, Harel Insurance Investments is 1.14 times less risky than Clal Biotechnology. It trades about 0.53 of its potential returns per unit of risk. Clal Biotechnology Industries is currently generating about -0.34 per unit of risk. If you would invest 364,100 in Harel Insurance Investments on August 27, 2024 and sell it today you would earn a total of 55,900 from holding Harel Insurance Investments or generate 15.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harel Insurance Investments vs. Clal Biotechnology Industries
Performance |
| Timeline |
| Harel Insurance Inve |
| Clal Biotechnology |
Harel Insurance and Clal Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Insurance and Clal Biotechnology
The main advantage of trading using opposite Harel Insurance and Clal Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance 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.| Harel Insurance vs. Bank Hapoalim | Harel Insurance vs. Israel Discount Bank | Harel Insurance vs. Bezeq Israeli Telecommunication | Harel Insurance vs. Elbit Systems |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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