Correlation Between Bank Leumi and Creative Media
Can any of the company-specific risk be diversified away by investing in both Bank Leumi and Creative Media 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 Creative Media 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 Creative Media Community, you can compare the effects of market volatilities on Bank Leumi and Creative Media 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 Creative Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Leumi and Creative Media.
Diversification Opportunities for Bank Leumi and Creative Media
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Creative is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank Leumi Le Israel and Creative Media Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creative Media Community 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 Creative Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creative Media Community has no effect on the direction of Bank Leumi i.e., Bank Leumi and Creative Media go up and down completely randomly.
Pair Corralation between Bank Leumi and Creative Media
Assuming the 90 days trading horizon Bank Leumi Le Israel is expected to generate 0.15 times more return on investment than Creative Media. However, Bank Leumi Le Israel is 6.5 times less risky than Creative Media. It trades about 0.27 of its potential returns per unit of risk. Creative Media Community is currently generating about -0.1 per unit of risk. If you would invest 440,700 in Bank Leumi Le Israel on November 27, 2024 and sell it today you would earn a total of 26,500 from holding Bank Leumi Le Israel or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Leumi Le Israel vs. Creative Media Community
Performance |
| Timeline |
| Bank Leumi Le |
| Creative Media Community |
Bank Leumi and Creative Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Leumi and Creative Media
The main advantage of trading using opposite Bank Leumi and Creative Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Leumi position performs unexpectedly, Creative Media 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 Creative Media will offset losses from the drop in Creative Media'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 |
| Creative Media vs. Nice | Creative Media vs. The Gold Bond | Creative Media vs. Bank Leumi Le Israel | Creative Media vs. ICL Israel Chemicals |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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