Correlation Between Batm Advanced and Bank Leumi
Can any of the company-specific risk be diversified away by investing in both Batm Advanced and Bank Leumi 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 Batm Advanced and Bank Leumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batm Advanced Communications and Bank Leumi Le Israel, you can compare the effects of market volatilities on Batm Advanced and Bank Leumi 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 Batm Advanced with a short position of Bank Leumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Bank Leumi.
Diversification Opportunities for Batm Advanced and Bank Leumi
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Batm and Bank is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Bank Leumi Le Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Leumi Le and Batm Advanced 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 Batm Advanced Communications are associated (or correlated) with Bank Leumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Leumi Le has no effect on the direction of Batm Advanced i.e., Batm Advanced and Bank Leumi go up and down completely randomly.
Pair Corralation between Batm Advanced and Bank Leumi
Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the Bank Leumi. In addition to that, Batm Advanced is 1.57 times more volatile than Bank Leumi Le Israel. It trades about -0.08 of its total potential returns per unit of risk. Bank Leumi Le Israel is currently generating about 0.48 per unit of volatility. If you would invest 374,477 in Bank Leumi Le Israel on August 31, 2024 and sell it today you would earn a total of 41,123 from holding Bank Leumi Le Israel or generate 10.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batm Advanced Communications vs. Bank Leumi Le Israel
Performance |
| Timeline |
| Batm Advanced Commun |
| Bank Leumi Le |
Batm Advanced and Bank Leumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and Bank Leumi
The main advantage of trading using opposite Batm Advanced and Bank Leumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced position performs unexpectedly, Bank Leumi 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 Leumi will offset losses from the drop in Bank Leumi's long position.| Batm Advanced vs. Storage Drop Storage | Batm Advanced vs. Brainsway | Batm Advanced vs. Mivne Real Estate | Batm Advanced vs. Photomyne |
| Bank Leumi vs. Bank Hapoalim | Bank Leumi vs. Israel Discount Bank | Bank Leumi vs. Mizrahi Tefahot | Bank Leumi vs. Bezeq Israeli Telecommunication |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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