Correlation Between Mizrahi Tefahot and Clal Industries
Can any of the company-specific risk be diversified away by investing in both Mizrahi Tefahot 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 Mizrahi Tefahot and Clal Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizrahi Tefahot and Clal Industries and, you can compare the effects of market volatilities on Mizrahi Tefahot 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 Mizrahi Tefahot with a short position of Clal Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizrahi Tefahot and Clal Industries.
Diversification Opportunities for Mizrahi Tefahot and Clal Industries
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mizrahi and Clal is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mizrahi Tefahot and Clal Industries and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Industries and Mizrahi Tefahot 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 Mizrahi Tefahot 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 Mizrahi Tefahot i.e., Mizrahi Tefahot and Clal Industries go up and down completely randomly.
Pair Corralation between Mizrahi Tefahot and Clal Industries
Assuming the 90 days trading horizon Mizrahi Tefahot is expected to generate 0.76 times more return on investment than Clal Industries. However, Mizrahi Tefahot is 1.31 times less risky than Clal Industries. It trades about 0.06 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 1,151,862 in Mizrahi Tefahot on August 29, 2024 and sell it today you would earn a total of 487,138 from holding Mizrahi Tefahot or generate 42.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mizrahi Tefahot vs. Clal Industries and
Performance |
| Timeline |
| Mizrahi Tefahot |
| Clal Industries |
Mizrahi Tefahot and Clal Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizrahi Tefahot and Clal Industries
The main advantage of trading using opposite Mizrahi Tefahot and Clal Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizrahi Tefahot 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.| Mizrahi Tefahot vs. Bank Leumi Le Israel | Mizrahi Tefahot vs. Bank Hapoalim | Mizrahi Tefahot vs. Israel Discount Bank | Mizrahi Tefahot vs. First International Bank |
| Clal Industries vs. Discount Investment Corp | Clal Industries vs. GODM Investments | Clal Industries vs. Abra Information Technologies | Clal Industries vs. Analyst IMS Investment |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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