Correlation Between Payment Financial and Clal Biotechnology
Can any of the company-specific risk be diversified away by investing in both Payment Financial and Clal Biotechnology 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 Payment Financial and Clal Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payment Financial Technologies and Clal Biotechnology Industries, you can compare the effects of market volatilities on Payment Financial and Clal Biotechnology 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 Payment Financial with a short position of Clal Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payment Financial and Clal Biotechnology.
Diversification Opportunities for Payment Financial and Clal Biotechnology
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Payment and Clal is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Payment Financial Technologies and Clal Biotechnology Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Biotechnology and Payment Financial 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 Payment Financial Technologies are associated (or correlated) with Clal Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clal Biotechnology has no effect on the direction of Payment Financial i.e., Payment Financial and Clal Biotechnology go up and down completely randomly.
Pair Corralation between Payment Financial and Clal Biotechnology
Assuming the 90 days trading horizon Payment Financial Technologies is expected to generate 2.29 times more return on investment than Clal Biotechnology. However, Payment Financial is 2.29 times more volatile than Clal Biotechnology Industries. It trades about 0.39 of its potential returns per unit of risk. Clal Biotechnology Industries is currently generating about -0.14 per unit of risk. If you would invest 25,581 in Payment Financial Technologies on August 29, 2024 and sell it today you would earn a total of 9,389 from holding Payment Financial Technologies or generate 36.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payment Financial Technologies vs. Clal Biotechnology Industries
Performance |
| Timeline |
| Payment Financial |
| Clal Biotechnology |
Payment Financial and Clal Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payment Financial and Clal Biotechnology
The main advantage of trading using opposite Payment Financial and Clal Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payment Financial position performs unexpectedly, Clal Biotechnology 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 Biotechnology will offset losses from the drop in Clal Biotechnology's long position.| Payment Financial vs. Unitronics | Payment Financial vs. PCB Tec | Payment Financial vs. Tower Semiconductor | Payment Financial vs. Priortech |
| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. BioLine RX | Clal Biotechnology vs. Evogene | Clal Biotechnology vs. Bezeq Israeli Telecommunication |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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