Correlation Between Harel Index and IShares NASDAQ
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By analyzing existing cross correlation between Harel Index Funds and iShares NASDAQ 100, you can compare the effects of market volatilities on Harel Index and IShares NASDAQ 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 IShares NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Index and IShares NASDAQ.
Diversification Opportunities for Harel Index and IShares NASDAQ
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harel and IShares is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Harel Index Funds and iShares NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares NASDAQ 100 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 IShares NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares NASDAQ 100 has no effect on the direction of Harel Index i.e., Harel Index and IShares NASDAQ go up and down completely randomly.
Pair Corralation between Harel Index and IShares NASDAQ
Assuming the 90 days trading horizon Harel Index is expected to generate 3.47 times less return on investment than IShares NASDAQ. But when comparing it to its historical volatility, Harel Index Funds is 6.54 times less risky than IShares NASDAQ. It trades about 0.18 of its potential returns per unit of risk. iShares NASDAQ 100 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 38,360,000 in iShares NASDAQ 100 on September 3, 2024 and sell it today you would earn a total of 5,100,000 from holding iShares NASDAQ 100 or generate 13.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harel Index Funds vs. iShares NASDAQ 100
Performance |
| Timeline |
| Harel Index Funds |
| iShares NASDAQ 100 |
Harel Index and IShares NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Index and IShares NASDAQ
The main advantage of trading using opposite Harel Index and IShares NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Index position performs unexpectedly, IShares NASDAQ 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 IShares NASDAQ will offset losses from the drop in IShares NASDAQ's long position.The idea behind Harel Index Funds and iShares NASDAQ 100 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.| IShares NASDAQ vs. Harel Index Funds | IShares NASDAQ vs. Harel Index Funds | IShares NASDAQ vs. Harel Sal SP |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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