Correlation Between Clal Industries and Bio View

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

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

Diversification Opportunities for Clal Industries and Bio View

-0.27

Correlation Coefficient

Clal Industries  Bio View

Very good diversification

The 3 months correlation between Clal and Bio is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Clal Industries and and Bio View in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio View and Clal Industries 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 Industries and are associated (or correlated) with Bio View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio View has no effect on the direction of Clal Industries i.e., Clal Industries and Bio View go up and down completely randomly.

Pair Corralation between Clal Industries and Bio View

Assuming the 90 days trading horizon Clal Industries and is expected to under-perform the Bio View. But the stock apears to be less risky and, when comparing its historical volatility, Clal Industries and is 1.58 times less risky than Bio View. The stock trades about -0.09 of its potential returns per unit of risk. The Bio View is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,870  in Bio View on October 11, 2024 and sell it today you would earn a total of  120.00  from holding Bio View or generate 4.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Clal Industries and  vs.  Bio View

Clal Industries

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Clal Industries and are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Clal Industries sustained solid returns over the last few months and may actually be approaching a breakup point.

Bio View

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bio View are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bio View sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clal Industries and Bio View

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

The idea behind Clal Industries and and Bio View 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.