Correlation Between Clal Insurance and Fattal 1998

Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Fattal 1998 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 Insurance and Fattal 1998 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clal Insurance Enterprises and Fattal 1998 Holdings, you can compare the effects of market volatilities on Clal Insurance and Fattal 1998 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 Insurance with a short position of Fattal 1998. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Fattal 1998.

Diversification Opportunities for Clal Insurance and Fattal 1998

0.23

Correlation Coefficient

Clal Insurance  Fattal 1998

Modest diversification

The 3 months correlation between Clal and Fattal is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Fattal 1998 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fattal 1998 Holdings and Clal Insurance 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 Insurance Enterprises are associated (or correlated) with Fattal 1998. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fattal 1998 Holdings has no effect on the direction of Clal Insurance i.e., Clal Insurance and Fattal 1998 go up and down completely randomly.

Pair Corralation between Clal Insurance and Fattal 1998

Assuming the 90 days trading horizon Clal Insurance Enterprises is expected to generate 1.18 times more return on investment than Fattal 1998. However, Clal Insurance is 1.18 times more volatile than Fattal 1998 Holdings. It trades about 0.31 of its potential returns per unit of risk. Fattal 1998 Holdings is currently generating about -0.05 per unit of risk. If you would invest  758,478  in Clal Insurance Enterprises on November 20, 2024 and sell it today you would earn a total of  249,522  from holding Clal Insurance Enterprises or generate 32.9% return on investment over 90 days.

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

Clal Insurance Enterprises  vs.  Fattal 1998 Holdings

Clal Insurance Enter

Risk-Adjusted Performance

Solid

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

Fattal 1998 Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fattal 1998 Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Fattal 1998 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Clal Insurance and Fattal 1998

The main advantage of trading using opposite Clal Insurance and Fattal 1998 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, Fattal 1998 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 Fattal 1998 will offset losses from the drop in Fattal 1998's long position.

The idea behind Clal Insurance Enterprises and Fattal 1998 Holdings 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.