Correlation Between Mivtach Shamir and Bank Leumi
Can any of the company-specific risk be diversified away by investing in both Mivtach Shamir and Bank Leumi 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 Mivtach Shamir and Bank Leumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mivtach Shamir and Bank Leumi Le Israel, you can compare the effects of market volatilities on Mivtach Shamir and Bank Leumi 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 Mivtach Shamir with a short position of Bank Leumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mivtach Shamir and Bank Leumi.
Diversification Opportunities for Mivtach Shamir and Bank Leumi
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mivtach and Bank is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mivtach Shamir and Bank Leumi Le Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Leumi Le and Mivtach Shamir 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 Mivtach Shamir are associated (or correlated) with Bank Leumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Leumi Le has no effect on the direction of Mivtach Shamir i.e., Mivtach Shamir and Bank Leumi go up and down completely randomly.
Pair Corralation between Mivtach Shamir and Bank Leumi
Assuming the 90 days trading horizon Mivtach Shamir is expected to generate 1.17 times more return on investment than Bank Leumi. However, Mivtach Shamir is 1.17 times more volatile than Bank Leumi Le Israel. It trades about 0.11 of its potential returns per unit of risk. Bank Leumi Le Israel is currently generating about 0.06 per unit of risk. If you would invest 799,519 in Mivtach Shamir on September 3, 2024 and sell it today you would earn a total of 998,481 from holding Mivtach Shamir or generate 124.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mivtach Shamir vs. Bank Leumi Le Israel
Performance |
| Timeline |
| Mivtach Shamir |
| Bank Leumi Le |
Mivtach Shamir and Bank Leumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mivtach Shamir and Bank Leumi
The main advantage of trading using opposite Mivtach Shamir and Bank Leumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mivtach Shamir position performs unexpectedly, Bank Leumi 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 Bank Leumi will offset losses from the drop in Bank Leumi's long position.| Mivtach Shamir vs. Bank Hapoalim | Mivtach Shamir vs. Israel Discount Bank | Mivtach Shamir vs. First International Bank | Mivtach Shamir vs. Elbit Systems |
| Bank Leumi vs. Bank Hapoalim | Bank Leumi vs. Israel Discount Bank | Bank Leumi vs. First International Bank | Bank Leumi vs. Elbit Systems |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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