Correlation Between Lesico and Clal Industries
Can any of the company-specific risk be diversified away by investing in both Lesico and Clal Industries 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 Lesico and Clal Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lesico and Clal Industries and, you can compare the effects of market volatilities on Lesico and Clal Industries 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 Lesico with a short position of Clal Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lesico and Clal Industries.
Diversification Opportunities for Lesico and Clal Industries
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lesico and Clal is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lesico and Clal Industries and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Industries and Lesico 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 Lesico are associated (or correlated) with Clal Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clal Industries has no effect on the direction of Lesico i.e., Lesico and Clal Industries go up and down completely randomly.
Pair Corralation between Lesico and Clal Industries
Assuming the 90 days trading horizon Lesico is expected to generate 23.92 times less return on investment than Clal Industries. In addition to that, Lesico is 1.56 times more volatile than Clal Industries and. It trades about 0.0 of its total potential returns per unit of risk. Clal Industries and is currently generating about 0.08 per unit of volatility. If you would invest 216,700 in Clal Industries and on December 1, 2024 and sell it today you would earn a total of 5,400 from holding Clal Industries and or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lesico vs. Clal Industries and
Performance |
| Timeline |
| Lesico |
| Clal Industries |
Lesico and Clal Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lesico and Clal Industries
The main advantage of trading using opposite Lesico and Clal Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lesico position performs unexpectedly, Clal Industries 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 Industries will offset losses from the drop in Clal Industries' long position.| Lesico vs. Bank Leumi Le Israel | Lesico vs. Alrov Properties Lodgings | Lesico vs. Israel Discount Bank | Lesico vs. Ilex Medical |
| Clal Industries vs. First International Bank | Clal Industries vs. Aura Investments | Clal Industries vs. Meitav Trade Inv | Clal Industries vs. Libra Insurance |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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