Correlation Between Bank Leumi and Matrix
Can any of the company-specific risk be diversified away by investing in both Bank Leumi and Matrix 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 Matrix 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 Matrix, you can compare the effects of market volatilities on Bank Leumi and Matrix 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 Matrix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Leumi and Matrix.
Diversification Opportunities for Bank Leumi and Matrix
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Matrix is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bank Leumi Le Israel and Matrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matrix 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 Matrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matrix has no effect on the direction of Bank Leumi i.e., Bank Leumi and Matrix go up and down completely randomly.
Pair Corralation between Bank Leumi and Matrix
Assuming the 90 days trading horizon Bank Leumi is expected to generate 1.01 times less return on investment than Matrix. But when comparing it to its historical volatility, Bank Leumi Le Israel is 1.31 times less risky than Matrix. It trades about 0.41 of its potential returns per unit of risk. Matrix is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 750,900 in Matrix on September 1, 2024 and sell it today you would earn a total of 71,700 from holding Matrix or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Leumi Le Israel vs. Matrix
Performance |
| Timeline |
| Bank Leumi Le |
| Matrix |
Bank Leumi and Matrix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Leumi and Matrix
The main advantage of trading using opposite Bank Leumi and Matrix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Leumi position performs unexpectedly, Matrix 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 Matrix will offset losses from the drop in Matrix's long position.| Bank Leumi vs. Menif Financial Services | Bank Leumi vs. Accel Solutions Group | Bank Leumi vs. Rani Zim Shopping | Bank Leumi vs. Rapac Communication Infrastructure |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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