Correlation Between Elron Electronic and Bank Hapoalim
Can any of the company-specific risk be diversified away by investing in both Elron Electronic 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 Elron Electronic and Bank Hapoalim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elron Electronic Industries and Bank Hapoalim, you can compare the effects of market volatilities on Elron Electronic 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 Elron Electronic with a short position of Bank Hapoalim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elron Electronic and Bank Hapoalim.
Diversification Opportunities for Elron Electronic and Bank Hapoalim
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elron and Bank is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Elron Electronic Industries and Bank Hapoalim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Hapoalim and Elron Electronic 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 Elron Electronic Industries 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 Elron Electronic i.e., Elron Electronic and Bank Hapoalim go up and down completely randomly.
Pair Corralation between Elron Electronic and Bank Hapoalim
Assuming the 90 days trading horizon Elron Electronic Industries is expected to generate 4.32 times more return on investment than Bank Hapoalim. However, Elron Electronic is 4.32 times more volatile than Bank Hapoalim. It trades about 0.26 of its potential returns per unit of risk. Bank Hapoalim is currently generating about 0.32 per unit of risk. If you would invest 34,200 in Elron Electronic Industries on September 1, 2024 and sell it today you would earn a total of 9,310 from holding Elron Electronic Industries or generate 27.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elron Electronic Industries vs. Bank Hapoalim
Performance |
| Timeline |
| Elron Electronic Ind |
| Bank Hapoalim |
Elron Electronic and Bank Hapoalim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elron Electronic and Bank Hapoalim
The main advantage of trading using opposite Elron Electronic and Bank Hapoalim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elron Electronic 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.| Elron Electronic vs. Menif Financial Services | Elron Electronic vs. Accel Solutions Group | Elron Electronic vs. Rani Zim Shopping | Elron Electronic vs. Mivtach Shamir |
| Bank Hapoalim vs. Bank Leumi Le Israel | Bank Hapoalim vs. Israel Discount Bank | Bank Hapoalim vs. Mizrahi Tefahot | Bank Hapoalim 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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