Correlation Between Hamama and Israel Discount
Can any of the company-specific risk be diversified away by investing in both Hamama and Israel Discount 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 Hamama and Israel Discount into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamama and Israel Discount Bank, you can compare the effects of market volatilities on Hamama and Israel Discount 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 Hamama with a short position of Israel Discount. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamama and Israel Discount.
Diversification Opportunities for Hamama and Israel Discount
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hamama and Israel is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hamama and Israel Discount Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Discount Bank and Hamama 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 Hamama are associated (or correlated) with Israel Discount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Discount Bank has no effect on the direction of Hamama i.e., Hamama and Israel Discount go up and down completely randomly.
Pair Corralation between Hamama and Israel Discount
Assuming the 90 days trading horizon Hamama is expected to under-perform the Israel Discount. In addition to that, Hamama is 1.42 times more volatile than Israel Discount Bank. It trades about -0.06 of its total potential returns per unit of risk. Israel Discount Bank is currently generating about 0.26 per unit of volatility. If you would invest 197,947 in Israel Discount Bank on September 3, 2024 and sell it today you would earn a total of 40,653 from holding Israel Discount Bank or generate 20.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamama vs. Israel Discount Bank
Performance |
| Timeline |
| Hamama |
| Israel Discount Bank |
Hamama and Israel Discount Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamama and Israel Discount
The main advantage of trading using opposite Hamama and Israel Discount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamama position performs unexpectedly, Israel Discount 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 Israel Discount will offset losses from the drop in Israel Discount's long position.| Hamama vs. Israel Discount Bank | Hamama vs. Azorim Investment Development | Hamama vs. Automatic Bank Services | Hamama vs. Aura Investments |
| Israel Discount vs. Bank Leumi Le Israel | Israel Discount vs. Bank Hapoalim | Israel Discount vs. Mizrahi Tefahot | Israel Discount vs. Bezeq Israeli Telecommunication |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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