Correlation Between Harel Insurance and Homebiogas
Can any of the company-specific risk be diversified away by investing in both Harel Insurance and Homebiogas 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 Homebiogas 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 Homebiogas, you can compare the effects of market volatilities on Harel Insurance and Homebiogas 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 Homebiogas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and Homebiogas.
Diversification Opportunities for Harel Insurance and Homebiogas
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harel and Homebiogas is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and Homebiogas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homebiogas 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 Homebiogas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homebiogas has no effect on the direction of Harel Insurance i.e., Harel Insurance and Homebiogas go up and down completely randomly.
Pair Corralation between Harel Insurance and Homebiogas
Assuming the 90 days trading horizon Harel Insurance Investments is expected to generate 0.3 times more return on investment than Homebiogas. However, Harel Insurance Investments is 3.34 times less risky than Homebiogas. It trades about 0.18 of its potential returns per unit of risk. Homebiogas is currently generating about -0.05 per unit of risk. If you would invest 281,094 in Harel Insurance Investments on November 3, 2024 and sell it today you would earn a total of 286,906 from holding Harel Insurance Investments or generate 102.07% 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. Homebiogas
Performance |
| Timeline |
| Harel Insurance Inve |
| Homebiogas |
Harel Insurance and Homebiogas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Insurance and Homebiogas
The main advantage of trading using opposite Harel Insurance and Homebiogas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance position performs unexpectedly, Homebiogas 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 Homebiogas will offset losses from the drop in Homebiogas' long position.| Harel Insurance vs. Migdal Insurance | Harel Insurance vs. Clal Insurance Enterprises | Harel Insurance vs. Bank Hapoalim | Harel Insurance vs. Bank Leumi Le Israel |
| Homebiogas vs. ICL Israel Chemicals | Homebiogas vs. G Willi Food International | Homebiogas vs. Mobile Max M | Homebiogas vs. Victory Supermarket Chain |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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