Correlation Between Clal Industries and Terminal X

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

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

Diversification Opportunities for Clal Industries and Terminal X

0.62

Correlation Coefficient

Clal Industries  Terminal X

Poor diversification

The 3 months correlation between Clal and Terminal is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Clal Industries and and Terminal X Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terminal X Online and Clal Industries 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 Industries and are associated (or correlated) with Terminal X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terminal X Online has no effect on the direction of Clal Industries i.e., Clal Industries and Terminal X go up and down completely randomly.

Pair Corralation between Clal Industries and Terminal X

Assuming the 90 days trading horizon Clal Industries and is expected to generate 1.81 times more return on investment than Terminal X. However, Clal Industries is 1.81 times more volatile than Terminal X Online. It trades about 0.13 of its potential returns per unit of risk. Terminal X Online is currently generating about 0.2 per unit of risk. If you would invest  195,300  in Clal Industries and on May 3, 2025 and sell it today you would earn a total of  32,800  from holding Clal Industries and or generate 16.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.08%
Values	Daily Returns

Clal Industries and  vs.  Terminal X Online

Clal Industries

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clal Industries and are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Clal Industries sustained solid returns over the last few months and may actually be approaching a breakup point.

Terminal X Online

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Terminal X Online are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Terminal X sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clal Industries and Terminal X

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

The idea behind Clal Industries and and Terminal X Online 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.