Correlation Between Bank Leumi and Spring Ventures
Can any of the company-specific risk be diversified away by investing in both Bank Leumi and Spring Ventures 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 Spring Ventures 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 Spring Ventures, you can compare the effects of market volatilities on Bank Leumi and Spring Ventures 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 Spring Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Leumi and Spring Ventures.
Diversification Opportunities for Bank Leumi and Spring Ventures
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Spring is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding Bank Leumi Le Israel and Spring Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Ventures 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 Spring Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spring Ventures has no effect on the direction of Bank Leumi i.e., Bank Leumi and Spring Ventures go up and down completely randomly.
Pair Corralation between Bank Leumi and Spring Ventures
Assuming the 90 days trading horizon Bank Leumi Le Israel is expected to generate 0.45 times more return on investment than Spring Ventures. However, Bank Leumi Le Israel is 2.24 times less risky than Spring Ventures. It trades about 0.64 of its potential returns per unit of risk. Spring Ventures is currently generating about -0.68 per unit of risk. If you would invest 371,500 in Bank Leumi Le Israel on August 26, 2024 and sell it today you would earn a total of 42,000 from holding Bank Leumi Le Israel or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Leumi Le Israel vs. Spring Ventures
Performance |
| Timeline |
| Bank Leumi Le |
| Spring Ventures |
Bank Leumi and Spring Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Leumi and Spring Ventures
The main advantage of trading using opposite Bank Leumi and Spring Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Leumi position performs unexpectedly, Spring Ventures 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 Spring Ventures will offset losses from the drop in Spring Ventures' long position.| Bank Leumi vs. Bank Hapoalim | Bank Leumi vs. Israel Discount Bank | Bank Leumi vs. Mizrahi Tefahot | Bank Leumi vs. Bezeq Israeli Telecommunication |
| Spring Ventures vs. Capital Point | Spring Ventures vs. Mivtach Shamir | Spring Ventures vs. Fattal 1998 Holdings | Spring Ventures vs. Atreyu Capital Markets |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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