Correlation Between Harel Insurance and MEITAV INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both Harel Insurance and MEITAV INVESTMENTS 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 MEITAV INVESTMENTS 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 MEITAV INVESTMENTS HOUSE, you can compare the effects of market volatilities on Harel Insurance and MEITAV INVESTMENTS 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 MEITAV INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and MEITAV INVESTMENTS.
Diversification Opportunities for Harel Insurance and MEITAV INVESTMENTS
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Harel and MEITAV is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and MEITAV INVESTMENTS HOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEITAV INVESTMENTS HOUSE 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 MEITAV INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEITAV INVESTMENTS HOUSE has no effect on the direction of Harel Insurance i.e., Harel Insurance and MEITAV INVESTMENTS go up and down completely randomly.
Pair Corralation between Harel Insurance and MEITAV INVESTMENTS
Assuming the 90 days trading horizon Harel Insurance is expected to generate 2.33 times less return on investment than MEITAV INVESTMENTS. But when comparing it to its historical volatility, Harel Insurance Investments is 1.96 times less risky than MEITAV INVESTMENTS. It trades about 0.45 of its potential returns per unit of risk. MEITAV INVESTMENTS HOUSE is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest 200,000 in MEITAV INVESTMENTS HOUSE on August 31, 2024 and sell it today you would earn a total of 69,100 from holding MEITAV INVESTMENTS HOUSE or generate 34.55% 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. MEITAV INVESTMENTS HOUSE
Performance |
| Timeline |
| Harel Insurance Inve |
| MEITAV INVESTMENTS HOUSE |
Harel Insurance and MEITAV INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Insurance and MEITAV INVESTMENTS
The main advantage of trading using opposite Harel Insurance and MEITAV INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance position performs unexpectedly, MEITAV INVESTMENTS 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 MEITAV INVESTMENTS will offset losses from the drop in MEITAV INVESTMENTS's 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 |
| MEITAV INVESTMENTS vs. Multi Retail Group | MEITAV INVESTMENTS vs. Retailors | MEITAV INVESTMENTS vs. First International Bank | MEITAV INVESTMENTS 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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