Correlation Between Scope Metals and Clal Insurance
Can any of the company-specific risk be diversified away by investing in both Scope Metals 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 Scope Metals and Clal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scope Metals Group and Clal Insurance Enterprises, you can compare the effects of market volatilities on Scope Metals 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 Scope Metals with a short position of Clal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scope Metals and Clal Insurance.
Diversification Opportunities for Scope Metals and Clal Insurance
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scope and Clal is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Scope Metals Group 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 Scope Metals 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 Scope Metals Group 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 Scope Metals i.e., Scope Metals and Clal Insurance go up and down completely randomly.
Pair Corralation between Scope Metals and Clal Insurance
Assuming the 90 days trading horizon Scope Metals is expected to generate 1.46 times less return on investment than Clal Insurance. But when comparing it to its historical volatility, Scope Metals Group is 1.15 times less risky than Clal Insurance. It trades about 0.26 of its potential returns per unit of risk. Clal Insurance Enterprises is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 908,100 in Clal Insurance Enterprises on November 27, 2024 and sell it today you would earn a total of 84,200 from holding Clal Insurance Enterprises or generate 9.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scope Metals Group vs. Clal Insurance Enterprises
Performance |
| Timeline |
| Scope Metals Group |
| Clal Insurance Enter |
Scope Metals and Clal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scope Metals and Clal Insurance
The main advantage of trading using opposite Scope Metals and Clal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scope Metals 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.| Scope Metals vs. Delek Automotive Systems | Scope Metals vs. Kerur Holdings | Scope Metals vs. Neto ME Holdings | Scope Metals vs. Bank Leumi Le Israel |
| Clal Insurance vs. Migdal Insurance | Clal Insurance vs. Harel Insurance Investments | Clal Insurance vs. Israel Discount Bank | Clal Insurance vs. Bank Hapoalim |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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