Correlation Between Bank Leumi and Photomyne
Can any of the company-specific risk be diversified away by investing in both Bank Leumi and Photomyne 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 Photomyne 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 Photomyne, you can compare the effects of market volatilities on Bank Leumi and Photomyne 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 Photomyne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Leumi and Photomyne.
Diversification Opportunities for Bank Leumi and Photomyne
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Photomyne is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bank Leumi Le Israel and Photomyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photomyne 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 Photomyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photomyne has no effect on the direction of Bank Leumi i.e., Bank Leumi and Photomyne go up and down completely randomly.
Pair Corralation between Bank Leumi and Photomyne
Assuming the 90 days trading horizon Bank Leumi Le Israel is expected to generate 1.16 times more return on investment than Photomyne. However, Bank Leumi is 1.16 times more volatile than Photomyne. It trades about 0.28 of its potential returns per unit of risk. Photomyne is currently generating about 0.28 per unit of risk. If you would invest 343,400 in Bank Leumi Le Israel on August 25, 2024 and sell it today you would earn a total of 70,100 from holding Bank Leumi Le Israel or generate 20.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.87% |
| Values | Daily Returns |
Bank Leumi Le Israel vs. Photomyne
Performance |
| Timeline |
| Bank Leumi Le |
| Photomyne |
Bank Leumi and Photomyne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Leumi and Photomyne
The main advantage of trading using opposite Bank Leumi and Photomyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Leumi position performs unexpectedly, Photomyne 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 Photomyne will offset losses from the drop in Photomyne'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 |
| Photomyne vs. Aura Investments | Photomyne vs. Harel Insurance Investments | Photomyne vs. Analyst IMS Investment | Photomyne vs. Arad Investment Industrial |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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