Correlation Between Bank Hapoalim and Henderson Land
Can any of the company-specific risk be diversified away by investing in both Bank Hapoalim and Henderson Land 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 Bank Hapoalim and Henderson Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Hapoalim ADR and Henderson Land Development, you can compare the effects of market volatilities on Bank Hapoalim and Henderson Land 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 Bank Hapoalim with a short position of Henderson Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Hapoalim and Henderson Land.
Diversification Opportunities for Bank Hapoalim and Henderson Land
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Henderson is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bank Hapoalim ADR and Henderson Land Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson Land Devel and Bank Hapoalim 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 Bank Hapoalim ADR are associated (or correlated) with Henderson Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson Land Devel has no effect on the direction of Bank Hapoalim i.e., Bank Hapoalim and Henderson Land go up and down completely randomly.
Pair Corralation between Bank Hapoalim and Henderson Land
Assuming the 90 days horizon Bank Hapoalim ADR is expected to generate 1.12 times more return on investment than Henderson Land. However, Bank Hapoalim is 1.12 times more volatile than Henderson Land Development. It trades about 0.1 of its potential returns per unit of risk. Henderson Land Development is currently generating about 0.03 per unit of risk. If you would invest 4,470 in Bank Hapoalim ADR on September 3, 2024 and sell it today you would earn a total of 1,380 from holding Bank Hapoalim ADR or generate 30.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Hapoalim ADR vs. Henderson Land Development
Performance |
| Timeline |
| Bank Hapoalim ADR |
| Henderson Land Devel |
Bank Hapoalim and Henderson Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Hapoalim and Henderson Land
The main advantage of trading using opposite Bank Hapoalim and Henderson Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Hapoalim position performs unexpectedly, Henderson Land 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 Henderson Land will offset losses from the drop in Henderson Land's long position.| Bank Hapoalim vs. Israel Discount Bank | Bank Hapoalim vs. Baraboo Bancorporation | Bank Hapoalim vs. Schweizerische Nationalbank | Bank Hapoalim vs. Danske Bank AS |
| Henderson Land vs. Hang Lung Properties | Henderson Land vs. Sun Hung Kai | Henderson Land vs. Hong Kong and | Henderson Land vs. New World Development |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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