Correlation Between Mivtach Shamir and Clal Industries
Can any of the company-specific risk be diversified away by investing in both Mivtach Shamir 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 Mivtach Shamir and Clal Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mivtach Shamir and Clal Industries and, you can compare the effects of market volatilities on Mivtach Shamir 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 Mivtach Shamir with a short position of Clal Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mivtach Shamir and Clal Industries.
Diversification Opportunities for Mivtach Shamir and Clal Industries
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mivtach and Clal is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mivtach Shamir and Clal Industries and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Industries and Mivtach Shamir 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 Mivtach Shamir 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 Mivtach Shamir i.e., Mivtach Shamir and Clal Industries go up and down completely randomly.
Pair Corralation between Mivtach Shamir and Clal Industries
Assuming the 90 days trading horizon Mivtach Shamir is expected to generate 0.85 times more return on investment than Clal Industries. However, Mivtach Shamir is 1.17 times less risky than Clal Industries. It trades about 0.11 of its potential returns per unit of risk. Clal Industries and is currently generating about 0.02 per unit of risk. If you would invest 799,519 in Mivtach Shamir on September 3, 2024 and sell it today you would earn a total of 998,481 from holding Mivtach Shamir or generate 124.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mivtach Shamir vs. Clal Industries and
Performance |
| Timeline |
| Mivtach Shamir |
| Clal Industries |
Mivtach Shamir and Clal Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mivtach Shamir and Clal Industries
The main advantage of trading using opposite Mivtach Shamir and Clal Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mivtach Shamir 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.| Mivtach Shamir vs. Bank Hapoalim | Mivtach Shamir vs. Israel Discount Bank | Mivtach Shamir vs. First International Bank | Mivtach Shamir vs. Elbit Systems |
| Clal Industries vs. Itay Financial AA | Clal Industries vs. Bank Leumi Le Israel | Clal Industries vs. Altshuler Shaham Financial | Clal Industries vs. Millennium Food Tech LP |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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