Correlation Between Sure Tech and Clal Industries
Can any of the company-specific risk be diversified away by investing in both Sure Tech 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 Sure Tech and Clal Industries 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 Industries and, you can compare the effects of market volatilities on Sure Tech 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 Sure Tech with a short position of Clal Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sure Tech and Clal Industries.
Diversification Opportunities for Sure Tech and Clal Industries
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sure and Clal is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sure Tech Investments LP and Clal Industries and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Industries 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 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 Sure Tech i.e., Sure Tech and Clal Industries go up and down completely randomly.
Pair Corralation between Sure Tech and Clal Industries
Assuming the 90 days trading horizon Sure Tech Investments LP is expected to generate 0.83 times more return on investment than Clal Industries. However, Sure Tech Investments LP is 1.2 times less risky than Clal Industries. It trades about -0.04 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 74,510 in Sure Tech Investments LP on December 28, 2024 and sell it today you would lose (3,540) from holding Sure Tech Investments LP or give up 4.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.08% |
Values | Daily Returns |
Sure Tech Investments LP vs. Clal Industries and
Performance |
Timeline |
Sure Tech Investments |
Clal Industries |
Sure Tech and Clal Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sure Tech and Clal Industries
The main advantage of trading using opposite Sure Tech and Clal Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sure Tech 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.Sure Tech vs. Augwind Energy Tech | Sure Tech vs. Skyline Investments | Sure Tech vs. Magic Software Enterprises | Sure Tech vs. Ram On Investments and |
Clal Industries vs. YD More Investments | Clal Industries vs. ICL Israel Chemicals | Clal Industries vs. Discount Investment Corp | Clal Industries vs. Batm Advanced Communications |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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