Correlation Between Harel Insurance and C Mer
Can any of the company-specific risk be diversified away by investing in both Harel Insurance and C Mer 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 C Mer 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 C Mer Industries, you can compare the effects of market volatilities on Harel Insurance and C Mer 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 C Mer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and C Mer.
Diversification Opportunities for Harel Insurance and C Mer
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Harel and CMER is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and C Mer Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Mer Industries 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 C Mer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Mer Industries has no effect on the direction of Harel Insurance i.e., Harel Insurance and C Mer go up and down completely randomly.
Pair Corralation between Harel Insurance and C Mer
Assuming the 90 days trading horizon Harel Insurance is expected to generate 3.07 times less return on investment than C Mer. But when comparing it to its historical volatility, Harel Insurance Investments is 1.88 times less risky than C Mer. It trades about 0.06 of its potential returns per unit of risk. C Mer Industries is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 59,980 in C Mer Industries on September 3, 2024 and sell it today you would earn a total of 136,120 from holding C Mer Industries or generate 226.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harel Insurance Investments vs. C Mer Industries
Performance |
| Timeline |
| Harel Insurance Inve |
| C Mer Industries |
Harel Insurance and C Mer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Insurance and C Mer
The main advantage of trading using opposite Harel Insurance and C Mer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance position performs unexpectedly, C Mer 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 C Mer will offset losses from the drop in C Mer's long position.| Harel Insurance vs. Bank Hapoalim | Harel Insurance vs. Israel Discount Bank | Harel Insurance vs. First International Bank | Harel Insurance vs. Elbit Systems |
| C Mer vs. Rimon Consulting Management | C Mer vs. Sofwave Medical | C Mer vs. B Communications | C Mer vs. Scope Metals Group |
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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