Correlation Between IDI Insurance and Clal Insurance
Can any of the company-specific risk be diversified away by investing in both IDI Insurance 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 IDI Insurance and Clal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDI Insurance and Clal Insurance Enterprises, you can compare the effects of market volatilities on IDI Insurance 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 IDI Insurance with a short position of Clal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDI Insurance and Clal Insurance.
Diversification Opportunities for IDI Insurance and Clal Insurance
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IDI and Clal is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding IDI Insurance 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 IDI 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 IDI Insurance 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 IDI Insurance i.e., IDI Insurance and Clal Insurance go up and down completely randomly.
Pair Corralation between IDI Insurance and Clal Insurance
Assuming the 90 days trading horizon IDI Insurance is expected to generate 2.63 times less return on investment than Clal Insurance. In addition to that, IDI Insurance is 1.07 times more volatile than Clal Insurance Enterprises. It trades about 0.08 of its total potential returns per unit of risk. Clal Insurance Enterprises is currently generating about 0.23 per unit of volatility. If you would invest 722,800 in Clal Insurance Enterprises on September 2, 2024 and sell it today you would earn a total of 48,400 from holding Clal Insurance Enterprises or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IDI Insurance vs. Clal Insurance Enterprises
Performance |
| Timeline |
| IDI Insurance |
| Clal Insurance Enter |
IDI Insurance and Clal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDI Insurance and Clal Insurance
The main advantage of trading using opposite IDI Insurance and Clal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDI Insurance 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.| IDI Insurance vs. Harel Insurance Investments | IDI Insurance vs. Migdal Insurance | IDI Insurance vs. Menora Miv Hld | IDI Insurance vs. The Phoenix Holdings |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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