Correlation Between MediPress Health and Bank Leumi
Can any of the company-specific risk be diversified away by investing in both MediPress Health 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 MediPress Health and Bank Leumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediPress Health Limited Partnership and Bank Leumi Le Israel, you can compare the effects of market volatilities on MediPress Health 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 MediPress Health with a short position of Bank Leumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediPress Health and Bank Leumi.
Diversification Opportunities for MediPress Health and Bank Leumi
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MediPress and Bank is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding MediPress Health Limited Partn 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 MediPress Health 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 MediPress Health Limited Partnership 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 MediPress Health i.e., MediPress Health and Bank Leumi go up and down completely randomly.
Pair Corralation between MediPress Health and Bank Leumi
Assuming the 90 days trading horizon MediPress Health Limited Partnership is expected to under-perform the Bank Leumi. In addition to that, MediPress Health is 1.32 times more volatile than Bank Leumi Le Israel. It trades about -0.09 of its total potential returns per unit of risk. Bank Leumi Le Israel is currently generating about 0.22 per unit of volatility. If you would invest 304,716 in Bank Leumi Le Israel on September 1, 2024 and sell it today you would earn a total of 108,284 from holding Bank Leumi Le Israel or generate 35.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.96% |
| Values | Daily Returns |
MediPress Health Limited Partn vs. Bank Leumi Le Israel
Performance |
| Timeline |
| MediPress Health Lim |
| Bank Leumi Le |
MediPress Health and Bank Leumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediPress Health and Bank Leumi
The main advantage of trading using opposite MediPress Health and Bank Leumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediPress Health 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.| MediPress Health vs. Nice | MediPress Health vs. The Gold Bond | MediPress Health vs. Bank Leumi Le Israel | MediPress Health vs. ICL Israel Chemicals |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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