Correlation Between Harel Insurance and Brand
Can any of the company-specific risk be diversified away by investing in both Harel Insurance and Brand 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 Harel Insurance and Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harel Insurance Investments and Brand Group, you can compare the effects of market volatilities on Harel Insurance and Brand 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 Harel Insurance with a short position of Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and Brand.
Diversification Opportunities for Harel Insurance and Brand
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harel and Brand is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and Brand Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brand Group and Harel Insurance 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 Harel Insurance Investments are associated (or correlated) with Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brand Group has no effect on the direction of Harel Insurance i.e., Harel Insurance and Brand go up and down completely randomly.
Pair Corralation between Harel Insurance and Brand
Assuming the 90 days trading horizon Harel Insurance Investments is expected to generate 0.96 times more return on investment than Brand. However, Harel Insurance Investments is 1.04 times less risky than Brand. It trades about 0.04 of its potential returns per unit of risk. Brand Group is currently generating about 0.01 per unit of risk. If you would invest 314,574 in Harel Insurance Investments on August 24, 2024 and sell it today you would earn a total of 105,426 from holding Harel Insurance Investments or generate 33.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harel Insurance Investments vs. Brand Group
Performance |
| Timeline |
| Harel Insurance Inve |
| Brand Group |
Harel Insurance and Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Insurance and Brand
The main advantage of trading using opposite Harel Insurance and Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance position performs unexpectedly, Brand 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 Brand will offset losses from the drop in Brand's long position.| Harel Insurance vs. Bank Hapoalim | Harel Insurance vs. Israel Discount Bank | Harel Insurance vs. Mizrahi Tefahot | Harel Insurance vs. Bezeq Israeli Telecommunication |
| Brand vs. Meitav Dash Investments | Brand vs. One Software Technologies | Brand vs. Electreon Wireless | Brand vs. B Communications |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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