Correlation Between Hang Seng and Israel Discount
Can any of the company-specific risk be diversified away by investing in both Hang Seng 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 Hang Seng and Israel Discount into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hang Seng Bank and Israel Discount Bank, you can compare the effects of market volatilities on Hang Seng 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 Hang Seng with a short position of Israel Discount. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hang Seng and Israel Discount.
Diversification Opportunities for Hang Seng and Israel Discount
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hang and Israel is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hang Seng Bank 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 Hang Seng 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 Hang Seng Bank 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 Hang Seng i.e., Hang Seng and Israel Discount go up and down completely randomly.
Pair Corralation between Hang Seng and Israel Discount
If you would invest 5,819 in Israel Discount Bank on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Israel Discount Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hang Seng Bank vs. Israel Discount Bank
Performance |
| Timeline |
| Hang Seng Bank |
| Israel Discount Bank |
Hang Seng and Israel Discount Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hang Seng and Israel Discount
The main advantage of trading using opposite Hang Seng and Israel Discount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hang Seng 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.| Hang Seng vs. Piraeus Bank SA | Hang Seng vs. Turkiye Garanti Bankasi | Hang Seng vs. Delhi Bank Corp | Hang Seng vs. Uwharrie Capital Corp |
| Israel Discount vs. Piraeus Bank SA | Israel Discount vs. Turkiye Garanti Bankasi | Israel Discount vs. Delhi Bank Corp | Israel Discount vs. Uwharrie Capital Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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