Correlation Between Bank Leumi and Alony Hetz
Can any of the company-specific risk be diversified away by investing in both Bank Leumi and Alony Hetz 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 Bank Leumi and Alony Hetz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Leumi Le Israel and Alony Hetz Properties, you can compare the effects of market volatilities on Bank Leumi and Alony Hetz 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 Bank Leumi with a short position of Alony Hetz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Leumi and Alony Hetz.
Diversification Opportunities for Bank Leumi and Alony Hetz
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Alony is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank Leumi Le Israel and Alony Hetz Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alony Hetz Properties and Bank Leumi 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 Bank Leumi Le Israel are associated (or correlated) with Alony Hetz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alony Hetz Properties has no effect on the direction of Bank Leumi i.e., Bank Leumi and Alony Hetz go up and down completely randomly.
Pair Corralation between Bank Leumi and Alony Hetz
Assuming the 90 days trading horizon Bank Leumi Le Israel is expected to generate 0.68 times more return on investment than Alony Hetz. However, Bank Leumi Le Israel is 1.48 times less risky than Alony Hetz. It trades about 0.07 of its potential returns per unit of risk. Alony Hetz Properties is currently generating about 0.0 per unit of risk. If you would invest 269,863 in Bank Leumi Le Israel on September 5, 2024 and sell it today you would earn a total of 161,937 from holding Bank Leumi Le Israel or generate 60.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.74% |
| Values | Daily Returns |
Bank Leumi Le Israel vs. Alony Hetz Properties
Performance |
| Timeline |
| Bank Leumi Le |
| Alony Hetz Properties |
Bank Leumi and Alony Hetz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Leumi and Alony Hetz
The main advantage of trading using opposite Bank Leumi and Alony Hetz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Leumi position performs unexpectedly, Alony Hetz 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 Alony Hetz will offset losses from the drop in Alony Hetz's long position.| Bank Leumi vs. Bank Hapoalim | Bank Leumi vs. Israel Discount Bank | Bank Leumi vs. Mizrahi Tefahot | Bank Leumi vs. Bezeq Israeli Telecommunication |
| Alony Hetz vs. Nextage Therapeutics | Alony Hetz vs. Israel China Biotechnology | Alony Hetz vs. The Gold Bond | Alony Hetz vs. Overseas Commerce |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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