Correlation Between Petrochemical and Clal Insurance
Can any of the company-specific risk be diversified away by investing in both Petrochemical and Clal Insurance 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 Petrochemical and Clal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrochemical and Clal Insurance Enterprises, you can compare the effects of market volatilities on Petrochemical and Clal Insurance 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 Petrochemical with a short position of Clal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrochemical and Clal Insurance.
Diversification Opportunities for Petrochemical and Clal Insurance
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Petrochemical and Clal is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Petrochemical and Clal Insurance Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Insurance Enter and Petrochemical 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 Petrochemical are associated (or correlated) with Clal Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clal Insurance Enter has no effect on the direction of Petrochemical i.e., Petrochemical and Clal Insurance go up and down completely randomly.
Pair Corralation between Petrochemical and Clal Insurance
Assuming the 90 days trading horizon Petrochemical is expected to under-perform the Clal Insurance. In addition to that, Petrochemical is 1.15 times more volatile than Clal Insurance Enterprises. It trades about -0.04 of its total potential returns per unit of risk. Clal Insurance Enterprises is currently generating about 0.25 per unit of volatility. If you would invest 717,000 in Clal Insurance Enterprises on September 1, 2024 and sell it today you would earn a total of 54,200 from holding Clal Insurance Enterprises or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrochemical vs. Clal Insurance Enterprises
Performance |
| Timeline |
| Petrochemical |
| Clal Insurance Enter |
Petrochemical and Clal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrochemical and Clal Insurance
The main advantage of trading using opposite Petrochemical and Clal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrochemical position performs unexpectedly, Clal Insurance 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 Insurance will offset losses from the drop in Clal Insurance's long position.| Petrochemical vs. Brainsway | Petrochemical vs. Mivne Real Estate | Petrochemical vs. Photomyne | Petrochemical vs. Israel Land Development |
| Clal Insurance vs. Menif Financial Services | Clal Insurance vs. Accel Solutions Group | Clal Insurance vs. Rani Zim Shopping | Clal Insurance vs. Rapac Communication Infrastructure |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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