Correlation Between Holmes Place and Clal Biotechnology
Can any of the company-specific risk be diversified away by investing in both Holmes Place 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 Holmes Place and Clal Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holmes Place International and Clal Biotechnology Industries, you can compare the effects of market volatilities on Holmes Place 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 Holmes Place with a short position of Clal Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holmes Place and Clal Biotechnology.
Diversification Opportunities for Holmes Place and Clal Biotechnology
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Holmes and Clal is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Holmes Place International and Clal Biotechnology Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Biotechnology and Holmes Place 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 Holmes Place International 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 Holmes Place i.e., Holmes Place and Clal Biotechnology go up and down completely randomly.
Pair Corralation between Holmes Place and Clal Biotechnology
Assuming the 90 days trading horizon Holmes Place International is expected to generate 0.48 times more return on investment than Clal Biotechnology. However, Holmes Place International is 2.07 times less risky than Clal Biotechnology. It trades about 0.1 of its potential returns per unit of risk. Clal Biotechnology Industries is currently generating about -0.01 per unit of risk. If you would invest 35,029 in Holmes Place International on November 27, 2024 and sell it today you would earn a total of 30,471 from holding Holmes Place International or generate 86.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holmes Place International vs. Clal Biotechnology Industries
Performance |
| Timeline |
| Holmes Place Interna |
| Clal Biotechnology |
Holmes Place and Clal Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holmes Place and Clal Biotechnology
The main advantage of trading using opposite Holmes Place and Clal Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holmes Place 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.| Holmes Place vs. Fattal 1998 Holdings | Holmes Place vs. Delek Group | Holmes Place vs. Bank Leumi Le Israel | Holmes Place vs. Matrix |
| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. BioLine RX | Clal Biotechnology vs. Evogene | Clal Biotechnology vs. Bezeq Israeli Telecommunication |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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