Correlation Between Bank Leumi and Lineage Cell
Can any of the company-specific risk be diversified away by investing in both Bank Leumi and Lineage Cell 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 Lineage Cell 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 Lineage Cell Therapeutics,, you can compare the effects of market volatilities on Bank Leumi and Lineage Cell 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 Lineage Cell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Leumi and Lineage Cell.
Diversification Opportunities for Bank Leumi and Lineage Cell
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Lineage is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bank Leumi Le Israel and Lineage Cell Therapeutics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lineage Cell Therape 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 Lineage Cell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lineage Cell Therape has no effect on the direction of Bank Leumi i.e., Bank Leumi and Lineage Cell go up and down completely randomly.
Pair Corralation between Bank Leumi and Lineage Cell
Assuming the 90 days trading horizon Bank Leumi is expected to generate 80.57 times less return on investment than Lineage Cell. But when comparing it to its historical volatility, Bank Leumi Le Israel is 245.16 times less risky than Lineage Cell. It trades about 0.64 of its potential returns per unit of risk. Lineage Cell Therapeutics, is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 32,200 in Lineage Cell Therapeutics, on August 27, 2024 and sell it today you would lose (12,620) from holding Lineage Cell Therapeutics, or give up 39.19% of portfolio value 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. Lineage Cell Therapeutics,
Performance |
| Timeline |
| Bank Leumi Le |
| Lineage Cell Therape |
Bank Leumi and Lineage Cell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Leumi and Lineage Cell
The main advantage of trading using opposite Bank Leumi and Lineage Cell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Leumi position performs unexpectedly, Lineage Cell 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 Lineage Cell will offset losses from the drop in Lineage Cell's long position.| Bank Leumi vs. Bank Hapoalim | Bank Leumi vs. Israel Discount Bank | Bank Leumi vs. Bezeq Israeli Telecommunication | Bank Leumi vs. Elbit Systems |
| Lineage Cell vs. Nice | Lineage Cell vs. The Gold Bond | Lineage Cell vs. Bank Leumi Le Israel | Lineage Cell 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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