Correlation Between Harel Insurance and Tikun Olam
Can any of the company-specific risk be diversified away by investing in both Harel Insurance and Tikun Olam 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 Tikun Olam 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 Tikun Olam Cannbit, you can compare the effects of market volatilities on Harel Insurance and Tikun Olam 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 Tikun Olam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and Tikun Olam.
Diversification Opportunities for Harel Insurance and Tikun Olam
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harel and Tikun is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and Tikun Olam Cannbit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tikun Olam Cannbit 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 Tikun Olam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tikun Olam Cannbit has no effect on the direction of Harel Insurance i.e., Harel Insurance and Tikun Olam go up and down completely randomly.
Pair Corralation between Harel Insurance and Tikun Olam
Assuming the 90 days trading horizon Harel Insurance Investments is expected to generate 0.4 times more return on investment than Tikun Olam. However, Harel Insurance Investments is 2.5 times less risky than Tikun Olam. It trades about 0.08 of its potential returns per unit of risk. Tikun Olam Cannbit is currently generating about -0.01 per unit of risk. If you would invest 274,476 in Harel Insurance Investments on September 13, 2024 and sell it today you would earn a total of 232,724 from holding Harel Insurance Investments or generate 84.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harel Insurance Investments vs. Tikun Olam Cannbit
Performance |
| Timeline |
| Harel Insurance Inve |
| Tikun Olam Cannbit |
Harel Insurance and Tikun Olam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Insurance and Tikun Olam
The main advantage of trading using opposite Harel Insurance and Tikun Olam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance position performs unexpectedly, Tikun Olam 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 Tikun Olam will offset losses from the drop in Tikun Olam's long position.| Harel Insurance vs. Bank Hapoalim | Harel Insurance vs. Israel Discount Bank | Harel Insurance vs. Mizrahi Tefahot | Harel Insurance vs. Bezeq Israeli Telecommunication |
| Tikun Olam vs. Harel Insurance Investments | Tikun Olam vs. More Mutual Funds | Tikun Olam vs. YD More Investments | Tikun Olam vs. Amanet Management 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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