Correlation Between Opal Balance and Harel Insurance
Can any of the company-specific risk be diversified away by investing in both Opal Balance 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 Opal Balance and Harel Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Opal Balance and Harel Insurance Investments, you can compare the effects of market volatilities on Opal Balance 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 Opal Balance with a short position of Harel Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opal Balance and Harel Insurance.
Diversification Opportunities for Opal Balance and Harel Insurance
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Opal and Harel is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Opal Balance 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 Opal Balance 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 Opal Balance 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 Opal Balance i.e., Opal Balance and Harel Insurance go up and down completely randomly.
Pair Corralation between Opal Balance and Harel Insurance
Assuming the 90 days trading horizon Opal Balance is expected to generate 1.39 times less return on investment than Harel Insurance. But when comparing it to its historical volatility, Opal Balance is 1.23 times less risky than Harel Insurance. It trades about 0.14 of its potential returns per unit of risk. Harel Insurance Investments is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 322,650 in Harel Insurance Investments on September 1, 2024 and sell it today you would earn a total of 115,350 from holding Harel Insurance Investments or generate 35.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Opal Balance vs. Harel Insurance Investments
Performance |
| Timeline |
| Opal Balance |
| Harel Insurance Inve |
Opal Balance and Harel Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Opal Balance and Harel Insurance
The main advantage of trading using opposite Opal Balance and Harel Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opal Balance 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.| Opal Balance vs. Nawi Brothers Group | Opal Balance vs. EN Shoham Business | Opal Balance vs. Peninsula Group | Opal Balance vs. Shikun Binui |
| Harel Insurance vs. Menif Financial Services | Harel Insurance vs. Accel Solutions Group | Harel Insurance vs. Rani Zim Shopping | Harel Insurance vs. Rapac Communication Infrastructure |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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