Correlation Between Bank Leumi and MediPress Health
Can any of the company-specific risk be diversified away by investing in both Bank Leumi and MediPress Health 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 MediPress Health 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 MediPress Health Limited Partnership, you can compare the effects of market volatilities on Bank Leumi and MediPress Health 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 MediPress Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Leumi and MediPress Health.
Diversification Opportunities for Bank Leumi and MediPress Health
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and MediPress is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank Leumi Le Israel and MediPress Health Limited Partn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediPress Health Lim 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 MediPress Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediPress Health Lim has no effect on the direction of Bank Leumi i.e., Bank Leumi and MediPress Health go up and down completely randomly.
Pair Corralation between Bank Leumi and MediPress Health
Assuming the 90 days trading horizon Bank Leumi is expected to generate 1.21 times less return on investment than MediPress Health. But when comparing it to its historical volatility, Bank Leumi Le Israel is 2.95 times less risky than MediPress Health. It trades about 0.07 of its potential returns per unit of risk. MediPress Health Limited Partnership is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,650 in MediPress Health Limited Partnership on August 29, 2024 and sell it today you would earn a total of 530.00 from holding MediPress Health Limited Partnership or generate 7.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Bank Leumi Le Israel vs. MediPress Health Limited Partn
Performance |
| Timeline |
| Bank Leumi Le |
| MediPress Health Lim |
Bank Leumi and MediPress Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Leumi and MediPress Health
The main advantage of trading using opposite Bank Leumi and MediPress Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Leumi position performs unexpectedly, MediPress Health 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 MediPress Health will offset losses from the drop in MediPress Health'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 |
| MediPress Health vs. Nice | MediPress Health vs. The Gold Bond | MediPress Health vs. Bank Leumi Le Israel | MediPress Health 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 Valuation module to check real value of public entities based on technical and fundamental data.
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