Correlation Between First International and Harel Insurance
Can any of the company-specific risk be diversified away by investing in both First International 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 First International and Harel Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First International Bank and Harel Insurance Investments, you can compare the effects of market volatilities on First International 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 First International with a short position of Harel Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of First International and Harel Insurance.
Diversification Opportunities for First International and Harel Insurance
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Harel is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding First International Bank 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 First International 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 First International Bank 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 First International i.e., First International and Harel Insurance go up and down completely randomly.
Pair Corralation between First International and Harel Insurance
Assuming the 90 days trading horizon First International is expected to generate 2.66 times less return on investment than Harel Insurance. But when comparing it to its historical volatility, First International Bank is 1.71 times less risky than Harel Insurance. It trades about 0.4 of its potential returns per unit of risk. Harel Insurance Investments is currently generating about 0.62 of returns per unit of risk over similar time horizon. If you would invest 364,100 in Harel Insurance Investments on August 27, 2024 and sell it today you would earn a total of 70,400 from holding Harel Insurance Investments or generate 19.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First International Bank vs. Harel Insurance Investments
Performance |
| Timeline |
| First International Bank |
| Harel Insurance Inve |
First International and Harel Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First International and Harel Insurance
The main advantage of trading using opposite First International and Harel Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First International 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.| First International vs. Israel Discount Bank | First International vs. Mizrahi Tefahot | First International vs. Bank Leumi Le Israel | First International vs. Bank Hapoalim |
| Harel Insurance vs. Bank Hapoalim | Harel Insurance vs. Israel Discount Bank | Harel Insurance vs. Bezeq Israeli Telecommunication | Harel Insurance 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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