Correlation Between Bank Leumi and Cellcom Israel
Can any of the company-specific risk be diversified away by investing in both Bank Leumi and Cellcom Israel 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 Cellcom Israel 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 Cellcom Israel, you can compare the effects of market volatilities on Bank Leumi and Cellcom Israel 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 Cellcom Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Leumi and Cellcom Israel.
Diversification Opportunities for Bank Leumi and Cellcom Israel
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Cellcom is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Bank Leumi Le Israel and Cellcom Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellcom Israel 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 Cellcom Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellcom Israel has no effect on the direction of Bank Leumi i.e., Bank Leumi and Cellcom Israel go up and down completely randomly.
Pair Corralation between Bank Leumi and Cellcom Israel
Assuming the 90 days trading horizon Bank Leumi Le Israel is expected to generate 0.38 times more return on investment than Cellcom Israel. However, Bank Leumi Le Israel is 2.66 times less risky than Cellcom Israel. It trades about 0.73 of its potential returns per unit of risk. Cellcom Israel is currently generating about 0.24 per unit of risk. If you would invest 371,500 in Bank Leumi Le Israel on August 28, 2024 and sell it today you would earn a total of 51,000 from holding Bank Leumi Le Israel or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.44% |
| Values | Daily Returns |
Bank Leumi Le Israel vs. Cellcom Israel
Performance |
| Timeline |
| Bank Leumi Le |
| Cellcom Israel |
Bank Leumi and Cellcom Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Leumi and Cellcom Israel
The main advantage of trading using opposite Bank Leumi and Cellcom Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Leumi position performs unexpectedly, Cellcom Israel 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 Cellcom Israel will offset losses from the drop in Cellcom Israel'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 |
| Cellcom Israel vs. Bank Leumi Le Israel | Cellcom Israel vs. Teva Pharmaceutical Industries | Cellcom Israel vs. Bank Hapoalim | Cellcom Israel 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |