Correlation Between Bank Leumi and Bonus Biogroup
Can any of the company-specific risk be diversified away by investing in both Bank Leumi and Bonus Biogroup 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 Bonus Biogroup 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 Bonus Biogroup, you can compare the effects of market volatilities on Bank Leumi and Bonus Biogroup 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 Bonus Biogroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Leumi and Bonus Biogroup.
Diversification Opportunities for Bank Leumi and Bonus Biogroup
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Bonus is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bank Leumi Le Israel and Bonus Biogroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonus Biogroup 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 Bonus Biogroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonus Biogroup has no effect on the direction of Bank Leumi i.e., Bank Leumi and Bonus Biogroup go up and down completely randomly.
Pair Corralation between Bank Leumi and Bonus Biogroup
Assuming the 90 days trading horizon Bank Leumi Le Israel is expected to generate 0.51 times more return on investment than Bonus Biogroup. However, Bank Leumi Le Israel is 1.97 times less risky than Bonus Biogroup. It trades about 0.11 of its potential returns per unit of risk. Bonus Biogroup is currently generating about -0.03 per unit of risk. If you would invest 271,651 in Bank Leumi Le Israel on September 4, 2024 and sell it today you would earn a total of 141,349 from holding Bank Leumi Le Israel or generate 52.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Leumi Le Israel vs. Bonus Biogroup
Performance |
| Timeline |
| Bank Leumi Le |
| Bonus Biogroup |
Bank Leumi and Bonus Biogroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Leumi and Bonus Biogroup
The main advantage of trading using opposite Bank Leumi and Bonus Biogroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Leumi position performs unexpectedly, Bonus Biogroup 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 Bonus Biogroup will offset losses from the drop in Bonus Biogroup's long position.| Bank Leumi vs. Bank Hapoalim | Bank Leumi vs. Israel Discount Bank | Bank Leumi vs. First International Bank | Bank Leumi vs. Elbit Systems |
| Bonus Biogroup vs. Bezeq Israeli Telecommunication | Bonus Biogroup vs. El Al Israel | Bonus Biogroup vs. Bank Leumi Le Israel | Bonus Biogroup vs. Elbit Systems |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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