Correlation Between Harel Index and KSM Mutual

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Can any of the company-specific risk be diversified away by investing in both Harel Index and KSM Mutual 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 Index and KSM Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harel Index Funds and KSM Mutual Funds, you can compare the effects of market volatilities on Harel Index and KSM Mutual 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 KSM Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Index and KSM Mutual.

Diversification Opportunities for Harel Index and KSM Mutual

-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Harel and KSM is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Harel Index Funds and KSM Mutual Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KSM Mutual 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 KSM Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KSM Mutual Funds has no effect on the direction of Harel Index i.e., Harel Index and KSM Mutual go up and down completely randomly.

Pair Corralation between Harel Index and KSM Mutual

Assuming the 90 days trading horizon Harel Index Funds is expected to under-perform the KSM Mutual. In addition to that, Harel Index is 1.12 times more volatile than KSM Mutual Funds. It trades about -0.44 of its total potential returns per unit of risk. KSM Mutual Funds is currently generating about 0.24 per unit of volatility. If you would invest  374,300  in KSM Mutual Funds on August 29, 2024 and sell it today you would earn a total of  14,600  from holding KSM Mutual Funds or generate 3.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy94.74%
ValuesDaily Returns

Harel Index Funds  vs.  KSM Mutual Funds

 Performance 
       Timeline  
Harel Index Funds 

Risk-Adjusted Performance

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Strong
Very Weak
Over the last 90 days Harel Index Funds has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.
KSM Mutual Funds 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in KSM Mutual Funds are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KSM Mutual may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Harel Index and KSM Mutual Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Harel Index and KSM Mutual

The main advantage of trading using opposite Harel Index and KSM Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Index position performs unexpectedly, KSM Mutual 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 KSM Mutual will offset losses from the drop in KSM Mutual's long position.
The idea behind Harel Index Funds and KSM Mutual 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.
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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