Correlation Between Israel Canada and Bank Hapoalim
Can any of the company-specific risk be diversified away by investing in both Israel Canada and Bank Hapoalim 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 Israel Canada and Bank Hapoalim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Canada and Bank Hapoalim, you can compare the effects of market volatilities on Israel Canada and Bank Hapoalim 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 Israel Canada with a short position of Bank Hapoalim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Canada and Bank Hapoalim.
Diversification Opportunities for Israel Canada and Bank Hapoalim
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Israel and Bank is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Israel Canada and Bank Hapoalim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Hapoalim and Israel Canada 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 Israel Canada are associated (or correlated) with Bank Hapoalim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Hapoalim has no effect on the direction of Israel Canada i.e., Israel Canada and Bank Hapoalim go up and down completely randomly.
Pair Corralation between Israel Canada and Bank Hapoalim
Assuming the 90 days trading horizon Israel Canada is expected to generate 1.7 times more return on investment than Bank Hapoalim. However, Israel Canada is 1.7 times more volatile than Bank Hapoalim. It trades about 0.06 of its potential returns per unit of risk. Bank Hapoalim is currently generating about 0.08 per unit of risk. If you would invest 104,824 in Israel Canada on September 12, 2024 and sell it today you would earn a total of 50,876 from holding Israel Canada or generate 48.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
Israel Canada vs. Bank Hapoalim
Performance |
| Timeline |
| Israel Canada |
| Bank Hapoalim |
Israel Canada and Bank Hapoalim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Canada and Bank Hapoalim
The main advantage of trading using opposite Israel Canada and Bank Hapoalim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Canada position performs unexpectedly, Bank Hapoalim 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 Bank Hapoalim will offset losses from the drop in Bank Hapoalim's long position.| Israel Canada vs. Azrieli Group | Israel Canada vs. Shikun Binui | Israel Canada vs. Ashtrom Group | Israel Canada vs. Enlight Renewable Energy |
| Bank Hapoalim vs. Bank Leumi Le Israel | Bank Hapoalim vs. Israel Discount Bank | Bank Hapoalim vs. Mizrahi Tefahot | Bank Hapoalim 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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