Correlation Between Amot Investments and Bank Hapoalim
Can any of the company-specific risk be diversified away by investing in both Amot Investments and Bank Hapoalim 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 Amot Investments and Bank Hapoalim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amot Investments and Bank Hapoalim, you can compare the effects of market volatilities on Amot Investments and Bank Hapoalim 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 Amot Investments with a short position of Bank Hapoalim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amot Investments and Bank Hapoalim.
Diversification Opportunities for Amot Investments and Bank Hapoalim
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amot and Bank is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Amot Investments and Bank Hapoalim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Hapoalim and Amot Investments 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 Amot Investments are associated (or correlated) with Bank Hapoalim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Hapoalim has no effect on the direction of Amot Investments i.e., Amot Investments and Bank Hapoalim go up and down completely randomly.
Pair Corralation between Amot Investments and Bank Hapoalim
Assuming the 90 days trading horizon Amot Investments is expected to generate 1.19 times more return on investment than Bank Hapoalim. However, Amot Investments is 1.19 times more volatile than Bank Hapoalim. It trades about 0.68 of its potential returns per unit of risk. Bank Hapoalim is currently generating about 0.49 per unit of risk. If you would invest 167,500 in Amot Investments on August 24, 2024 and sell it today you would earn a total of 28,500 from holding Amot Investments or generate 17.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amot Investments vs. Bank Hapoalim
Performance |
| Timeline |
| Amot Investments |
| Bank Hapoalim |
Amot Investments and Bank Hapoalim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amot Investments and Bank Hapoalim
The main advantage of trading using opposite Amot Investments and Bank Hapoalim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amot Investments position performs unexpectedly, Bank Hapoalim 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 Bank Hapoalim will offset losses from the drop in Bank Hapoalim's long position.| Amot Investments vs. Alony Hetz Properties | Amot Investments vs. Azrieli Group | Amot Investments vs. Melisron | Amot Investments vs. Bank Leumi Le Israel |
| Bank Hapoalim vs. Israel Discount Bank | Bank Hapoalim vs. Bezeq Israeli Telecommunication | Bank Hapoalim vs. Elbit Systems |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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