Correlation Between Bank Leumi and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both Bank Leumi and Batm Advanced 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 Batm Advanced 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 Batm Advanced Communications, you can compare the effects of market volatilities on Bank Leumi and Batm Advanced 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 Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Leumi and Batm Advanced.
Diversification Opportunities for Bank Leumi and Batm Advanced
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Batm is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank Leumi Le Israel and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun 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 Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of Bank Leumi i.e., Bank Leumi and Batm Advanced go up and down completely randomly.
Pair Corralation between Bank Leumi and Batm Advanced
Assuming the 90 days trading horizon Bank Leumi Le Israel is expected to generate 0.78 times more return on investment than Batm Advanced. However, Bank Leumi Le Israel is 1.29 times less risky than Batm Advanced. It trades about 0.22 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.02 per unit of risk. If you would invest 303,468 in Bank Leumi Le Israel on September 2, 2024 and sell it today you would earn a total of 109,532 from holding Bank Leumi Le Israel or generate 36.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Leumi Le Israel vs. Batm Advanced Communications
Performance |
| Timeline |
| Bank Leumi Le |
| Batm Advanced Commun |
Bank Leumi and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Leumi and Batm Advanced
The main advantage of trading using opposite Bank Leumi and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Leumi position performs unexpectedly, Batm Advanced 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 Batm Advanced will offset losses from the drop in Batm Advanced'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 |
| Batm Advanced vs. Brainsway | Batm Advanced vs. Mivne Real Estate | Batm Advanced vs. Photomyne | Batm Advanced vs. Israel Land Development |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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