Correlation Between Harel Insurance and Trendline
Can any of the company-specific risk be diversified away by investing in both Harel Insurance and Trendline 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 Trendline 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 Trendline, you can compare the effects of market volatilities on Harel Insurance and Trendline 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 Trendline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and Trendline.
Diversification Opportunities for Harel Insurance and Trendline
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Harel and Trendline is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and Trendline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trendline 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 Trendline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trendline has no effect on the direction of Harel Insurance i.e., Harel Insurance and Trendline go up and down completely randomly.
Pair Corralation between Harel Insurance and Trendline
Assuming the 90 days trading horizon Harel Insurance Investments is expected to generate 0.67 times more return on investment than Trendline. However, Harel Insurance Investments is 1.5 times less risky than Trendline. It trades about 0.52 of its potential returns per unit of risk. Trendline is currently generating about -0.18 per unit of risk. If you would invest 400,900 in Harel Insurance Investments on September 12, 2024 and sell it today you would earn a total of 69,000 from holding Harel Insurance Investments or generate 17.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harel Insurance Investments vs. Trendline
Performance |
| Timeline |
| Harel Insurance Inve |
| Trendline |
Harel Insurance and Trendline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Insurance and Trendline
The main advantage of trading using opposite Harel Insurance and Trendline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance position performs unexpectedly, Trendline 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 Trendline will offset losses from the drop in Trendline'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 |
| Trendline vs. Hiron Trade Investments Industrial | Trendline vs. Netz Hotels | Trendline vs. Willy Food | Trendline vs. Veridis Environment |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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