Correlation Between Harel Insurance and Delek
Can any of the company-specific risk be diversified away by investing in both Harel Insurance and Delek 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 Delek 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 Delek Group, you can compare the effects of market volatilities on Harel Insurance and Delek 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 Delek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and Delek.
Diversification Opportunities for Harel Insurance and Delek
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Harel and Delek is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and Delek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek 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 Delek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Group has no effect on the direction of Harel Insurance i.e., Harel Insurance and Delek go up and down completely randomly.
Pair Corralation between Harel Insurance and Delek
Assuming the 90 days trading horizon Harel Insurance Investments is expected to generate 1.12 times more return on investment than Delek. However, Harel Insurance is 1.12 times more volatile than Delek Group. It trades about 0.53 of its potential returns per unit of risk. Delek Group is currently generating about 0.25 per unit of risk. If you would invest 364,100 in Harel Insurance Investments on August 24, 2024 and sell it today you would earn a total of 55,900 from holding Harel Insurance Investments or generate 15.35% 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. Delek Group
Performance |
| Timeline |
| Harel Insurance Inve |
| Delek Group |
Harel Insurance and Delek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Insurance and Delek
The main advantage of trading using opposite Harel Insurance and Delek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance position performs unexpectedly, Delek 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 Delek will offset losses from the drop in Delek'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 |
| Delek vs. Fattal 1998 Holdings | Delek vs. El Al Israel | Delek vs. Bank Leumi Le Israel | Delek vs. Teva Pharmaceutical Industries |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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