Correlation Between Electra and Harel Insurance
Can any of the company-specific risk be diversified away by investing in both Electra and Harel Insurance 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 Electra and Harel Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electra and Harel Insurance Investments, you can compare the effects of market volatilities on Electra and Harel Insurance 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 Electra with a short position of Harel Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra and Harel Insurance.
Diversification Opportunities for Electra and Harel Insurance
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Electra and Harel is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Electra and Harel Insurance Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harel Insurance Inve and Electra 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 Electra are associated (or correlated) with Harel Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harel Insurance Inve has no effect on the direction of Electra i.e., Electra and Harel Insurance go up and down completely randomly.
Pair Corralation between Electra and Harel Insurance
Assuming the 90 days trading horizon Electra is expected to under-perform the Harel Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Electra is 1.01 times less risky than Harel Insurance. The stock trades about -0.11 of its potential returns per unit of risk. The Harel Insurance Investments is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 544,900 in Harel Insurance Investments on November 28, 2024 and sell it today you would earn a total of 33,100 from holding Harel Insurance Investments or generate 6.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra vs. Harel Insurance Investments
Performance |
| Timeline |
| Electra |
| Harel Insurance Inve |
Electra and Harel Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra and Harel Insurance
The main advantage of trading using opposite Electra and Harel Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra position performs unexpectedly, Harel Insurance 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 Harel Insurance will offset losses from the drop in Harel Insurance's long position.| Electra vs. Alony Hetz Properties | Electra vs. Melisron | Electra vs. Shufersal | Electra vs. Israel Discount Bank |
| Harel Insurance vs. Migdal Insurance | Harel Insurance vs. Clal Insurance Enterprises | Harel Insurance vs. Bank Hapoalim | Harel Insurance vs. Bank Leumi Le Israel |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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