Correlation Between Harel Insurance and Naphtha
Can any of the company-specific risk be diversified away by investing in both Harel Insurance and Naphtha 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 Naphtha 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 Naphtha, you can compare the effects of market volatilities on Harel Insurance and Naphtha 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 Naphtha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and Naphtha.
Diversification Opportunities for Harel Insurance and Naphtha
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Harel and Naphtha is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and Naphtha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naphtha 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 Naphtha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naphtha has no effect on the direction of Harel Insurance i.e., Harel Insurance and Naphtha go up and down completely randomly.
Pair Corralation between Harel Insurance and Naphtha
Assuming the 90 days trading horizon Harel Insurance is expected to generate 1.0 times less return on investment than Naphtha. In addition to that, Harel Insurance is 1.17 times more volatile than Naphtha. It trades about 0.6 of its total potential returns per unit of risk. Naphtha is currently generating about 0.7 per unit of volatility. If you would invest 213,000 in Naphtha on August 29, 2024 and sell it today you would earn a total of 44,000 from holding Naphtha or generate 20.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Harel Insurance Investments vs. Naphtha
Performance |
| Timeline |
| Harel Insurance Inve |
| Naphtha |
Harel Insurance and Naphtha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Insurance and Naphtha
The main advantage of trading using opposite Harel Insurance and Naphtha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance position performs unexpectedly, Naphtha 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 Naphtha will offset losses from the drop in Naphtha's long position.| Harel Insurance vs. Elbit Systems | Harel Insurance vs. Discount Investment Corp | Harel Insurance vs. Clal Insurance Enterprises | Harel Insurance vs. AudioCodes |
| Naphtha vs. Migdal Insurance | Naphtha vs. Harel Insurance Investments | Naphtha vs. Delek Automotive Systems | Naphtha vs. Airport City |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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