Correlation Between Bank Leumi and Analyst IMS
Can any of the company-specific risk be diversified away by investing in both Bank Leumi and Analyst IMS 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 Analyst IMS 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 Analyst IMS Investment, you can compare the effects of market volatilities on Bank Leumi and Analyst IMS 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 Analyst IMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Leumi and Analyst IMS.
Diversification Opportunities for Bank Leumi and Analyst IMS
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Analyst is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bank Leumi Le Israel and Analyst IMS Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analyst IMS Investment 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 Analyst IMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analyst IMS Investment has no effect on the direction of Bank Leumi i.e., Bank Leumi and Analyst IMS go up and down completely randomly.
Pair Corralation between Bank Leumi and Analyst IMS
Assuming the 90 days trading horizon Bank Leumi is expected to generate 15.27 times less return on investment than Analyst IMS. But when comparing it to its historical volatility, Bank Leumi Le Israel is 1.53 times less risky than Analyst IMS. It trades about 0.08 of its potential returns per unit of risk. Analyst IMS Investment is currently generating about 0.78 of returns per unit of risk over similar time horizon. If you would invest 499,400 in Analyst IMS Investment on October 9, 2024 and sell it today you would earn a total of 139,500 from holding Analyst IMS Investment or generate 27.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Leumi Le Israel vs. Analyst IMS Investment
Performance |
| Timeline |
| Bank Leumi Le |
| Analyst IMS Investment |
Bank Leumi and Analyst IMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Leumi and Analyst IMS
The main advantage of trading using opposite Bank Leumi and Analyst IMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Leumi position performs unexpectedly, Analyst IMS 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 Analyst IMS will offset losses from the drop in Analyst IMS'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 |
| Analyst IMS vs. Bank Leumi Le Israel | Analyst IMS vs. Bank Hapoalim | Analyst IMS vs. Mizrahi Tefahot | Analyst IMS 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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