Correlation Between Gold Bond and Clal Industries

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

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

Diversification Opportunities for Gold Bond and Clal Industries

-0.55

Correlation Coefficient

Gold Bond  Clal Industries

Excellent diversification

The 3 months correlation between Gold and Clal is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding The Gold Bond and Clal Industries and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Industries and Gold Bond 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 The Gold Bond are associated (or correlated) with Clal Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clal Industries has no effect on the direction of Gold Bond i.e., Gold Bond and Clal Industries go up and down completely randomly.

Pair Corralation between Gold Bond and Clal Industries

Assuming the 90 days trading horizon The Gold Bond is expected to generate 0.86 times more return on investment than Clal Industries. However, The Gold Bond is 1.16 times less risky than Clal Industries. It trades about 0.06 of its potential returns per unit of risk. Clal Industries and is currently generating about -0.1 per unit of risk. If you would invest  1,680,577  in The Gold Bond on December 29, 2024 and sell it today you would earn a total of  89,423  from holding The Gold Bond or generate 5.32% return on investment over 90 days.

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

The Gold Bond  vs.  Clal Industries and

Gold Bond

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Gold Bond are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gold Bond may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Clal Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clal Industries and 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 basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Gold Bond and Clal Industries

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

The idea behind The Gold Bond and Clal Industries and 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 Stocks Directory module to find actively traded stocks across global markets.