Correlation Between Multi Retail and Harel Insurance
Can any of the company-specific risk be diversified away by investing in both Multi Retail and Harel Insurance 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 Multi Retail and Harel Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Retail Group and Harel Insurance Investments, you can compare the effects of market volatilities on Multi Retail and Harel Insurance 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 Multi Retail with a short position of Harel Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Retail and Harel Insurance.
Diversification Opportunities for Multi Retail and Harel Insurance
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Multi and Harel is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Multi Retail Group and Harel Insurance Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harel Insurance Inve and Multi Retail 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 Multi Retail Group are associated (or correlated) with Harel Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harel Insurance Inve has no effect on the direction of Multi Retail i.e., Multi Retail and Harel Insurance go up and down completely randomly.
Pair Corralation between Multi Retail and Harel Insurance
Assuming the 90 days trading horizon Multi Retail Group is expected to generate 1.66 times more return on investment than Harel Insurance. However, Multi Retail is 1.66 times more volatile than Harel Insurance Investments. It trades about 0.33 of its potential returns per unit of risk. Harel Insurance Investments is currently generating about 0.34 per unit of risk. If you would invest 119,700 in Multi Retail Group on November 3, 2024 and sell it today you would earn a total of 19,200 from holding Multi Retail Group or generate 16.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Retail Group vs. Harel Insurance Investments
Performance |
| Timeline |
| Multi Retail Group |
| Harel Insurance Inve |
Multi Retail and Harel Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Retail and Harel Insurance
The main advantage of trading using opposite Multi Retail and Harel Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Retail position performs unexpectedly, Harel Insurance 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 Harel Insurance will offset losses from the drop in Harel Insurance's long position.| Multi Retail vs. Hiron Trade Investments Industrial | Multi Retail vs. Veridis Environment | Multi Retail vs. Azorim Investment Development | Multi Retail vs. Amot Investments |
| Harel Insurance vs. Migdal Insurance | Harel Insurance vs. Clal Insurance Enterprises | Harel Insurance vs. Bank Hapoalim | Harel Insurance vs. Bank Leumi Le Israel |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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