Correlation Between Harel Insurance and Discount Investment
Can any of the company-specific risk be diversified away by investing in both Harel Insurance and Discount Investment 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 Discount Investment 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 Discount Investment Corp, you can compare the effects of market volatilities on Harel Insurance and Discount Investment 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 Discount Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and Discount Investment.
Diversification Opportunities for Harel Insurance and Discount Investment
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Harel and Discount is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and Discount Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Discount Investment Corp 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 Discount Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Discount Investment Corp has no effect on the direction of Harel Insurance i.e., Harel Insurance and Discount Investment go up and down completely randomly.
Pair Corralation between Harel Insurance and Discount Investment
Assuming the 90 days trading horizon Harel Insurance Investments is expected to generate 0.48 times more return on investment than Discount Investment. However, Harel Insurance Investments is 2.09 times less risky than Discount Investment. It trades about 0.4 of its potential returns per unit of risk. Discount Investment Corp is currently generating about 0.15 per unit of risk. If you would invest 392,000 in Harel Insurance Investments on September 2, 2024 and sell it today you would earn a total of 46,000 from holding Harel Insurance Investments or generate 11.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harel Insurance Investments vs. Discount Investment Corp
Performance |
| Timeline |
| Harel Insurance Inve |
| Discount Investment Corp |
Harel Insurance and Discount Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Insurance and Discount Investment
The main advantage of trading using opposite Harel Insurance and Discount Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance position performs unexpectedly, Discount Investment 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 Discount Investment will offset losses from the drop in Discount Investment's long position.| Harel Insurance vs. Menif Financial Services | Harel Insurance vs. Accel Solutions Group | Harel Insurance vs. Rani Zim Shopping | Harel Insurance vs. Rapac Communication Infrastructure |
| Discount Investment vs. Arad | Discount Investment vs. Alony Hetz Properties | Discount Investment vs. Airport City | Discount Investment vs. Harel Insurance Investments |
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 CEOs Directory module to screen CEOs from public companies around the world.
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