Correlation Between Bank Leumi and Cannabotech
Can any of the company-specific risk be diversified away by investing in both Bank Leumi and Cannabotech 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 Cannabotech 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 Cannabotech, you can compare the effects of market volatilities on Bank Leumi and Cannabotech 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 Cannabotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Leumi and Cannabotech.
Diversification Opportunities for Bank Leumi and Cannabotech
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Cannabotech is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bank Leumi Le Israel and Cannabotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabotech 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 Cannabotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabotech has no effect on the direction of Bank Leumi i.e., Bank Leumi and Cannabotech go up and down completely randomly.
Pair Corralation between Bank Leumi and Cannabotech
Assuming the 90 days trading horizon Bank Leumi Le Israel is expected to generate 0.15 times more return on investment than Cannabotech. However, Bank Leumi Le Israel is 6.83 times less risky than Cannabotech. It trades about 0.39 of its potential returns per unit of risk. Cannabotech is currently generating about -0.14 per unit of risk. If you would invest 427,700 in Bank Leumi Le Israel on October 23, 2024 and sell it today you would earn a total of 34,300 from holding Bank Leumi Le Israel or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Leumi Le Israel vs. Cannabotech
Performance |
| Timeline |
| Bank Leumi Le |
| Cannabotech |
Bank Leumi and Cannabotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Leumi and Cannabotech
The main advantage of trading using opposite Bank Leumi and Cannabotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Leumi position performs unexpectedly, Cannabotech 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 Cannabotech will offset losses from the drop in Cannabotech'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 |
| Cannabotech vs. Electreon Wireless | Cannabotech vs. Bezeq Israeli Telecommunication | Cannabotech vs. Gilat Telecom Global | Cannabotech vs. Amot Investments |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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