Correlation Between Melisron and Bank Leumi
Can any of the company-specific risk be diversified away by investing in both Melisron 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 Melisron and Bank Leumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melisron and Bank Leumi Le Israel, you can compare the effects of market volatilities on Melisron 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 Melisron with a short position of Bank Leumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melisron and Bank Leumi.
Diversification Opportunities for Melisron and Bank Leumi
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Melisron and Bank is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Melisron 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 Melisron 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 Melisron 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 Melisron i.e., Melisron and Bank Leumi go up and down completely randomly.
Pair Corralation between Melisron and Bank Leumi
Assuming the 90 days trading horizon Melisron is expected to generate 1.42 times less return on investment than Bank Leumi. In addition to that, Melisron is 1.26 times more volatile than Bank Leumi Le Israel. It trades about 0.27 of its total potential returns per unit of risk. Bank Leumi Le Israel is currently generating about 0.48 per unit of volatility. If you would invest 374,477 in Bank Leumi Le Israel on August 31, 2024 and sell it today you would earn a total of 41,123 from holding Bank Leumi Le Israel or generate 10.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melisron vs. Bank Leumi Le Israel
Performance |
| Timeline |
| Melisron |
| Bank Leumi Le |
Melisron and Bank Leumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melisron and Bank Leumi
The main advantage of trading using opposite Melisron and Bank Leumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melisron 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.| Melisron vs. Azrieli Group | Melisron vs. Alony Hetz Properties | Melisron vs. Amot Investments | Melisron vs. Bank Leumi Le Israel |
| Bank Leumi vs. Bank Hapoalim | Bank Leumi vs. Israel Discount Bank | Bank Leumi vs. Mizrahi Tefahot | Bank Leumi vs. Bezeq Israeli Telecommunication |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |