Correlation Between Harel Insurance and More Provident
Can any of the company-specific risk be diversified away by investing in both Harel Insurance and More Provident 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 More Provident 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 More Provident Funds, you can compare the effects of market volatilities on Harel Insurance and More Provident 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 More Provident. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and More Provident.
Diversification Opportunities for Harel Insurance and More Provident
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Harel and More is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and More Provident Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on More Provident Funds 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 More Provident. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of More Provident Funds has no effect on the direction of Harel Insurance i.e., Harel Insurance and More Provident go up and down completely randomly.
Pair Corralation between Harel Insurance and More Provident
Assuming the 90 days trading horizon Harel Insurance Investments is expected to generate 0.83 times more return on investment than More Provident. However, Harel Insurance Investments is 1.21 times less risky than More Provident. It trades about 0.65 of its potential returns per unit of risk. More Provident Funds is currently generating about 0.41 per unit of risk. If you would invest 370,200 in Harel Insurance Investments on September 19, 2024 and sell it today you would earn a total of 160,800 from holding Harel Insurance Investments or generate 43.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 96.97% |
Values | Daily Returns |
Harel Insurance Investments vs. More Provident Funds
Performance |
Timeline |
Harel Insurance Inve |
More Provident Funds |
Harel Insurance and More Provident Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harel Insurance and More Provident
The main advantage of trading using opposite Harel Insurance and More Provident positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance position performs unexpectedly, More Provident 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 More Provident will offset losses from the drop in More Provident's long position.Harel Insurance vs. Bank Hapoalim | ||
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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 Correlations module to find global opportunities by holding instruments from different markets.
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