Correlation Between Harel Insurance and Bank Hapoalim
Can any of the company-specific risk be diversified away by investing in both Harel Insurance and Bank Hapoalim 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 Bank Hapoalim 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 Bank Hapoalim, you can compare the effects of market volatilities on Harel Insurance and Bank Hapoalim 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 Bank Hapoalim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and Bank Hapoalim.
Diversification Opportunities for Harel Insurance and Bank Hapoalim
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Harel and Bank is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and Bank Hapoalim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Hapoalim 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 Bank Hapoalim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Hapoalim has no effect on the direction of Harel Insurance i.e., Harel Insurance and Bank Hapoalim go up and down completely randomly.
Pair Corralation between Harel Insurance and Bank Hapoalim
Assuming the 90 days trading horizon Harel Insurance Investments is expected to generate 1.28 times more return on investment than Bank Hapoalim. However, Harel Insurance is 1.28 times more volatile than Bank Hapoalim. It trades about 0.08 of its potential returns per unit of risk. Bank Hapoalim is currently generating about 0.08 per unit of risk. If you would invest 269,413 in Harel Insurance Investments on August 27, 2024 and sell it today you would earn a total of 150,587 from holding Harel Insurance Investments or generate 55.89% 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. Bank Hapoalim
Performance |
| Timeline |
| Harel Insurance Inve |
| Bank Hapoalim |
Harel Insurance and Bank Hapoalim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Insurance and Bank Hapoalim
The main advantage of trading using opposite Harel Insurance and Bank Hapoalim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance position performs unexpectedly, Bank Hapoalim 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 Bank Hapoalim will offset losses from the drop in Bank Hapoalim's long position.| Harel Insurance vs. Bank Hapoalim | Harel Insurance vs. Israel Discount Bank | Harel Insurance vs. Bezeq Israeli Telecommunication | Harel Insurance vs. Elbit Systems |
| Bank Hapoalim vs. Israel Discount Bank | Bank Hapoalim vs. Bezeq Israeli Telecommunication | Bank Hapoalim vs. Elbit Systems |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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