Correlation Between Bank Leumi and Opal Balance
Can any of the company-specific risk be diversified away by investing in both Bank Leumi and Opal Balance 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 Opal Balance 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 Opal Balance, you can compare the effects of market volatilities on Bank Leumi and Opal Balance 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 Opal Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Leumi and Opal Balance.
Diversification Opportunities for Bank Leumi and Opal Balance
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Opal is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bank Leumi Le Israel and Opal Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opal Balance 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 Opal Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opal Balance has no effect on the direction of Bank Leumi i.e., Bank Leumi and Opal Balance go up and down completely randomly.
Pair Corralation between Bank Leumi and Opal Balance
Assuming the 90 days trading horizon Bank Leumi Le Israel is expected to generate 0.58 times more return on investment than Opal Balance. However, Bank Leumi Le Israel is 1.71 times less risky than Opal Balance. It trades about 0.08 of its potential returns per unit of risk. Opal Balance is currently generating about 0.04 per unit of risk. If you would invest 269,593 in Bank Leumi Le Israel on November 2, 2024 and sell it today you would earn a total of 178,907 from holding Bank Leumi Le Israel or generate 66.36% 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. Opal Balance
Performance |
| Timeline |
| Bank Leumi Le |
| Opal Balance |
Bank Leumi and Opal Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Leumi and Opal Balance
The main advantage of trading using opposite Bank Leumi and Opal Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Leumi position performs unexpectedly, Opal Balance 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 Opal Balance will offset losses from the drop in Opal Balance'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 |
| Opal Balance vs. Nawi Brothers Group | Opal Balance vs. EN Shoham Business | Opal Balance vs. Peninsula Group | Opal Balance vs. Shikun Binui |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |