Correlation Between Sure Tech and Clal Biotechnology
Can any of the company-specific risk be diversified away by investing in both Sure Tech 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 Sure Tech and Clal Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sure Tech Investments LP and Clal Biotechnology Industries, you can compare the effects of market volatilities on Sure Tech 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 Sure Tech with a short position of Clal Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sure Tech and Clal Biotechnology.
Diversification Opportunities for Sure Tech and Clal Biotechnology
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sure and Clal is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sure Tech Investments LP and Clal Biotechnology Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Biotechnology and Sure Tech 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 Sure Tech Investments LP 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 Sure Tech i.e., Sure Tech and Clal Biotechnology go up and down completely randomly.
Pair Corralation between Sure Tech and Clal Biotechnology
Assuming the 90 days trading horizon Sure Tech Investments LP is expected to under-perform the Clal Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Sure Tech Investments LP is 1.53 times less risky than Clal Biotechnology. The stock trades about -0.14 of its potential returns per unit of risk. The Clal Biotechnology Industries is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 3,610 in Clal Biotechnology Industries on November 3, 2024 and sell it today you would lose (110.00) from holding Clal Biotechnology Industries or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Sure Tech Investments LP vs. Clal Biotechnology Industries
Performance |
| Timeline |
| Sure Tech Investments |
| Clal Biotechnology |
Sure Tech and Clal Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sure Tech and Clal Biotechnology
The main advantage of trading using opposite Sure Tech and Clal Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sure Tech 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.| Sure Tech vs. Feat Fund Investments | Sure Tech vs. Abra Information Technologies | Sure Tech vs. Dan Hotels | Sure Tech vs. Azorim Investment Development |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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