Correlation Between Nice and Clal Insurance

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

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

Diversification Opportunities for Nice and Clal Insurance

-0.36

Correlation Coefficient

Nice  Clal Insurance

Very good diversification

The 3 months correlation between Nice and Clal is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nice and Clal Insurance Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Insurance Enter and Nice 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 Nice are associated (or correlated) with Clal Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clal Insurance Enter has no effect on the direction of Nice i.e., Nice and Clal Insurance go up and down completely randomly.

Pair Corralation between Nice and Clal Insurance

Assuming the 90 days trading horizon Nice is expected to under-perform the Clal Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Nice is 1.38 times less risky than Clal Insurance. The stock trades about -0.05 of its potential returns per unit of risk. The Clal Insurance Enterprises is currently generating about 0.41 of returns per unit of risk over similar time horizon. 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 Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nice  vs.  Clal Insurance Enterprises

Nice

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nice has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Clal Insurance Enter

Risk-Adjusted Performance

Very 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.

Pair Trading with Nice and Clal Insurance

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

The idea behind Nice and Clal Insurance Enterprises 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.