Correlation Between FIBI Holdings and Bank Hapoalim
Can any of the company-specific risk be diversified away by investing in both FIBI Holdings 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 FIBI Holdings and Bank Hapoalim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIBI Holdings and Bank Hapoalim, you can compare the effects of market volatilities on FIBI Holdings 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 FIBI Holdings with a short position of Bank Hapoalim. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIBI Holdings and Bank Hapoalim.
Diversification Opportunities for FIBI Holdings and Bank Hapoalim
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FIBI and Bank is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding FIBI Holdings and Bank Hapoalim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Hapoalim and FIBI Holdings 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 FIBI Holdings 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 FIBI Holdings i.e., FIBI Holdings and Bank Hapoalim go up and down completely randomly.
Pair Corralation between FIBI Holdings and Bank Hapoalim
Assuming the 90 days trading horizon FIBI Holdings is expected to generate 6.03 times less return on investment than Bank Hapoalim. But when comparing it to its historical volatility, FIBI Holdings is 1.41 times less risky than Bank Hapoalim. It trades about 0.09 of its potential returns per unit of risk. Bank Hapoalim is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 383,537 in Bank Hapoalim on August 31, 2024 and sell it today you would earn a total of 35,963 from holding Bank Hapoalim or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
FIBI Holdings vs. Bank Hapoalim
Performance |
| Timeline |
| FIBI Holdings |
| Bank Hapoalim |
FIBI Holdings and Bank Hapoalim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIBI Holdings and Bank Hapoalim
The main advantage of trading using opposite FIBI Holdings and Bank Hapoalim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIBI Holdings 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.| FIBI Holdings vs. First International Bank | FIBI Holdings vs. Mizrahi Tefahot | FIBI Holdings vs. Israel Discount Bank | FIBI Holdings vs. Bank Leumi Le Israel |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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