Correlation Between Harel Insurance and Nextage Therapeutics
Can any of the company-specific risk be diversified away by investing in both Harel Insurance and Nextage Therapeutics 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 Nextage Therapeutics 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 Nextage Therapeutics, you can compare the effects of market volatilities on Harel Insurance and Nextage Therapeutics 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 Nextage Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and Nextage Therapeutics.
Diversification Opportunities for Harel Insurance and Nextage Therapeutics
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harel and Nextage is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and Nextage Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextage Therapeutics 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 Nextage Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextage Therapeutics has no effect on the direction of Harel Insurance i.e., Harel Insurance and Nextage Therapeutics go up and down completely randomly.
Pair Corralation between Harel Insurance and Nextage Therapeutics
Assuming the 90 days trading horizon Harel Insurance is expected to generate 2.31 times less return on investment than Nextage Therapeutics. But when comparing it to its historical volatility, Harel Insurance Investments is 2.88 times less risky than Nextage Therapeutics. It trades about 0.53 of its potential returns per unit of risk. Nextage Therapeutics is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 5,900 in Nextage Therapeutics on August 26, 2024 and sell it today you would earn a total of 2,200 from holding Nextage Therapeutics or generate 37.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harel Insurance Investments vs. Nextage Therapeutics
Performance |
| Timeline |
| Harel Insurance Inve |
| Nextage Therapeutics |
Harel Insurance and Nextage Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Insurance and Nextage Therapeutics
The main advantage of trading using opposite Harel Insurance and Nextage Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance position performs unexpectedly, Nextage Therapeutics 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 Nextage Therapeutics will offset losses from the drop in Nextage Therapeutics' 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 |
| Nextage Therapeutics vs. Netz Hotels | Nextage Therapeutics vs. Migdal Insurance | Nextage Therapeutics vs. Harel Insurance Investments | Nextage Therapeutics vs. Menora Miv Hld |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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