Correlation Between Klil Industries and Ralco Agencies
Can any of the company-specific risk be diversified away by investing in both Klil Industries and Ralco Agencies 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 Klil Industries and Ralco Agencies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klil Industries and Ralco Agencies, you can compare the effects of market volatilities on Klil Industries and Ralco Agencies 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 Klil Industries with a short position of Ralco Agencies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klil Industries and Ralco Agencies.
Diversification Opportunities for Klil Industries and Ralco Agencies
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Klil and Ralco is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Klil Industries and Ralco Agencies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ralco Agencies and Klil Industries 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 Klil Industries are associated (or correlated) with Ralco Agencies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ralco Agencies has no effect on the direction of Klil Industries i.e., Klil Industries and Ralco Agencies go up and down completely randomly.
Pair Corralation between Klil Industries and Ralco Agencies
Assuming the 90 days trading horizon Klil Industries is expected to generate 2.35 times more return on investment than Ralco Agencies. However, Klil Industries is 2.35 times more volatile than Ralco Agencies. It trades about 0.36 of its potential returns per unit of risk. Ralco Agencies is currently generating about 0.69 per unit of risk. If you would invest 2,087,000 in Klil Industries on September 13, 2024 and sell it today you would earn a total of 699,000 from holding Klil Industries or generate 33.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Klil Industries vs. Ralco Agencies
Performance |
| Timeline |
| Klil Industries |
| Ralco Agencies |
Klil Industries and Ralco Agencies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klil Industries and Ralco Agencies
The main advantage of trading using opposite Klil Industries and Ralco Agencies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klil Industries position performs unexpectedly, Ralco Agencies 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 Ralco Agencies will offset losses from the drop in Ralco Agencies' long position.| Klil Industries vs. Aran Research and | Klil Industries vs. Al Bad Massuot Yitzhak | Klil Industries vs. Analyst IMS Investment | Klil Industries vs. Golan Plastic |
| Ralco Agencies vs. Migdal Insurance | Ralco Agencies vs. Clal Insurance Enterprises | Ralco Agencies vs. Bank Leumi Le Israel | Ralco Agencies vs. Israel Discount Bank |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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