Correlation Between Harel Index and Psagot Index
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By analyzing existing cross correlation between Harel Index Funds and Psagot Index Funds, you can compare the effects of market volatilities on Harel Index and Psagot Index 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 Index with a short position of Psagot Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Index and Psagot Index.
Diversification Opportunities for Harel Index and Psagot Index
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harel and Psagot is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Harel Index Funds and Psagot Index Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Psagot Index Funds and Harel Index 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 Index Funds are associated (or correlated) with Psagot Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Psagot Index Funds has no effect on the direction of Harel Index i.e., Harel Index and Psagot Index go up and down completely randomly.
Pair Corralation between Harel Index and Psagot Index
Assuming the 90 days trading horizon Harel Index is expected to generate 1.6 times less return on investment than Psagot Index. In addition to that, Harel Index is 1.62 times more volatile than Psagot Index Funds. It trades about 0.05 of its total potential returns per unit of risk. Psagot Index Funds is currently generating about 0.12 per unit of volatility. If you would invest 244,400 in Psagot Index Funds on September 3, 2024 and sell it today you would earn a total of 118,500 from holding Psagot Index Funds or generate 48.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Harel Index Funds vs. Psagot Index Funds
Performance |
| Timeline |
| Harel Index Funds |
| Psagot Index Funds |
Harel Index and Psagot Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Index and Psagot Index
The main advantage of trading using opposite Harel Index and Psagot Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Index position performs unexpectedly, Psagot Index 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 Psagot Index will offset losses from the drop in Psagot Index's long position.The idea behind Harel Index Funds and Psagot Index Funds pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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