Correlation Between Clal Biotechnology and Shufersal

Can any of the company-specific risk be diversified away by investing in both Clal Biotechnology and Shufersal 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 Clal Biotechnology and Shufersal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clal Biotechnology Industries and Shufersal, you can compare the effects of market volatilities on Clal Biotechnology and Shufersal 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 Clal Biotechnology with a short position of Shufersal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Biotechnology and Shufersal.

Diversification Opportunities for Clal Biotechnology and Shufersal

-0.73

Correlation Coefficient

Clal Biotechnology  Shufersal

Pay attention - limited upside

The 3 months correlation between Clal and Shufersal is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Clal Biotechnology Industries and Shufersal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shufersal and Clal Biotechnology 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 Clal Biotechnology Industries are associated (or correlated) with Shufersal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shufersal has no effect on the direction of Clal Biotechnology i.e., Clal Biotechnology and Shufersal go up and down completely randomly.

Pair Corralation between Clal Biotechnology and Shufersal

Assuming the 90 days trading horizon Clal Biotechnology Industries is expected to under-perform the Shufersal. In addition to that, Clal Biotechnology is 1.97 times more volatile than Shufersal. It trades about -0.07 of its total potential returns per unit of risk. Shufersal is currently generating about 0.31 per unit of volatility. If you would invest  316,300  in Shufersal on September 14, 2024 and sell it today you would earn a total of  68,800  from holding Shufersal or generate 21.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Clal Biotechnology Industries  vs.  Shufersal

Clal Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clal Biotechnology Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Shufersal

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shufersal are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Shufersal sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clal Biotechnology and Shufersal

The main advantage of trading using opposite Clal Biotechnology and Shufersal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Biotechnology position performs unexpectedly, Shufersal 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 Shufersal will offset losses from the drop in Shufersal's long position.

The idea behind Clal Biotechnology Industries and Shufersal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.