Correlation Between Internet Gold and Clal Insurance
Can any of the company-specific risk be diversified away by investing in both Internet Gold 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 Internet Gold and Clal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Internet Gold Golden and Clal Insurance Enterprises, you can compare the effects of market volatilities on Internet Gold 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 Internet Gold with a short position of Clal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Gold and Clal Insurance.
Diversification Opportunities for Internet Gold and Clal Insurance
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Internet and Clal is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Internet Gold Golden 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 Internet Gold 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 Internet Gold Golden 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 Internet Gold i.e., Internet Gold and Clal Insurance go up and down completely randomly.
Pair Corralation between Internet Gold and Clal Insurance
Assuming the 90 days trading horizon Internet Gold Golden is expected to under-perform the Clal Insurance. In addition to that, Internet Gold is 4.16 times more volatile than Clal Insurance Enterprises. It trades about -0.02 of its total potential returns per unit of risk. Clal Insurance Enterprises is currently generating about 0.43 per unit of volatility. If you would invest 648,500 in Clal Insurance Enterprises on August 24, 2024 and sell it today you would earn a total of 101,500 from holding Clal Insurance Enterprises or generate 15.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Internet Gold Golden vs. Clal Insurance Enterprises
Performance |
| Timeline |
| Internet Gold Golden |
| Clal Insurance Enter |
Internet Gold and Clal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Gold and Clal Insurance
The main advantage of trading using opposite Internet Gold and Clal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Gold 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.| Internet Gold vs. Bezeq Israeli Telecommunication | Internet Gold vs. Partner | Internet Gold vs. Cellcom Israel | Internet Gold vs. B Communications |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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