Correlation Between Clal Insurance and Netz Hotels

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Can any of the company-specific risk be diversified away by investing in both Clal Insurance and Netz Hotels 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 Netz Hotels 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 Netz Hotels, you can compare the effects of market volatilities on Clal Insurance and Netz Hotels 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 Netz Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clal Insurance and Netz Hotels.

Diversification Opportunities for Clal Insurance and Netz Hotels

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between Clal and Netz is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Clal Insurance Enterprises and Netz Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netz Hotels 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 Netz Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netz Hotels has no effect on the direction of Clal Insurance i.e., Clal Insurance and Netz Hotels go up and down completely randomly.

Pair Corralation between Clal Insurance and Netz Hotels

Assuming the 90 days trading horizon Clal Insurance Enterprises is expected to generate 0.71 times more return on investment than Netz Hotels. However, Clal Insurance Enterprises is 1.42 times less risky than Netz Hotels. It trades about 0.41 of its potential returns per unit of risk. Netz Hotels is currently generating about 0.03 per unit of risk. If you would invest  916,412  in Clal Insurance Enterprises on April 23, 2025 and sell it today you would earn a total of  749,588  from holding Clal Insurance Enterprises or generate 81.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy97.96%
ValuesDaily Returns

Clal Insurance Enterprises  vs.  Netz Hotels

 Performance 
       Timeline  
Clal Insurance Enter 

Risk-Adjusted Performance

Very Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Clal Insurance Enterprises are ranked lower than 32 (%) 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.
Netz Hotels 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Netz Hotels are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Netz Hotels may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Clal Insurance and Netz Hotels Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Clal Insurance and Netz Hotels

The main advantage of trading using opposite Clal Insurance and Netz Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clal Insurance position performs unexpectedly, Netz Hotels 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 Netz Hotels will offset losses from the drop in Netz Hotels' long position.
The idea behind Clal Insurance Enterprises and Netz Hotels 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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